China's services trade grows along with deficit

The mainland's services trade grew steadily in the first half, although a trade deficit widened from a year earlier, indicating there is room to boost the sector.

Combined imports and exports of the services sector rose 15.3 per cent in the six months to US$284.7 billion from the same period last year, the Ministry of Commerce said yesterday.

The deficit grew 5.6 per cent to US$58.4 billion. The deficit mainly stemmed from tourism, transport, franchise and outsourcing, and insurance, the ministry said.

"China's services trade has long been in deficit because the country still lacks competitiveness in high-technology areas such as finance and legal services," Everbright Securities chief economist Xu Gao said. "The deficit will last quite a while."

The gain in trade of services outpaced that of goods, which increased only 1.2 per cent in the first half because of exports and imports volatility earlier this year. Services trade remained small, accounting for 12.3 per cent of the country's total trade in the first half, although the share rose from 10.9 per cent a year earlier. Total trade of goods reached US$2 trillion in the six months.

Beijing is keen to boost services as it aims to rely less on the labour-intensive export sector, which faces headwinds from an ageing population and wobbly external demand.