Official data from the Ministry of Commerce reveals that the total value of China's services trade reached 3.78 trillion yuan in the first half of the year, marking an 8.3% increase year-on-year. Notably, service exports surged by 17.6% to 1.5 trillion yuan, while the services trade deficit narrowed by 161.4 billion yuan to 770.35 billion yuan compared to the same period last year.

These figures underscore a profound shift in the global trade landscape, where services trade and industry cooperation have become new growth drivers. They also highlight the enhanced quality and efficiency of China's services sector, which saw its value-added output grow by 5.2% in the first six months, accounting for 59.5% of GDP and solidifying its position as the nation's largest industry. So, what are the latest trends and highlights in China's service exports?

Travel Services Lead Export Growth

Travel services exports, encompassing tourism, education, and medical visits, reached 229.2 billion yuan in the first half of the year, a remarkable 31.1% increase year-on-year, making it the fastest-growing segment among the top five service export categories. Spending by inbound visitors on accommodation, dining, transport, shopping, and entertainment is counted within this figure.

Recent policy optimizations, including visa-free entry and departure tax refunds, have fueled vibrant activity in "China Travel" and "China Shopping." On July 1st, a new nationwide "small-amount spot-check system" for departure tax rebates took effect, replacing physical inspections of every application with random checks for those under 10,000 yuan. Self-service tax refund kiosks at Luohu Port and Shenzhen Airport, supporting 13 languages, now process refunds in as little as two to three minutes. In the first month of the new policy, Shenzhen Customs processed 13,000 tax rebate verification cases totaling 170 million yuan, representing a 2.2-fold and 94.1% increase, respectively.

According to customs officials, international visitors are diversifying their purchases beyond traditional souvenirs like tea and silk, with domestic digital products, apparel, and cultural creative items becoming increasingly popular. The travel footprint of foreign tourists is also expanding from first-tier cities like Beijing, Shanghai, Guangzhou, and Shenzhen to lesser-known destinations. Data from Qunar shows that inbound flight bookings on its platform covered 160 domestic cities in the first half of the year—from Heihe near the Sino-Russian border to tropical Sanya, from Jiamusi in the east to Kashgar in the west—20 more cities than the same period last year.

The average length of stay is also increasing. Tujia, a homestay platform, reports that foreign guests stayed in homes across 330 Chinese cities during the first half, with an average stay of 2.8 days, a 10% increase year-on-year. During the summer, this figure rose to 4.7 days. "Many foreign visitors are now eager to explore small cities, communities, and villages, getting to know hosts and local life, and taking more time to see a more authentic and diverse China," said Hu Yang, senior vice president of Tujia.

This sentiment is echoed by high-profile visitors. Elon Musk recently praised China on social media, strongly recommending others to visit, while his mother, Maye Musk, added that "every city in China has its unique charm." Inbound tourism is increasingly blending with consumption and cultural experiences, emerging as a key pillar of services trade growth.

Knowledge-Intensive Services Surpass Half of Total Exports

Another significant development is the robust growth in knowledge-intensive service exports, which reached 805.67 billion yuan in the first half, a 12.8% increase that represents 53.5% of total service exports. XtalPi, an AI-driven technology company, exemplifies this trend, having delivered an intelligent, automated drug discovery lab to South Korea's JW Pharmaceutical, advanced a strategic partnership with a US biotech firm, and secured an AI drug discovery deal exceeding $400 million with a major international pharmaceutical company.

"We are transforming our proprietary AI algorithms, tools, and automated experimental capabilities into standardized, deliverable solutions for pharmaceutical and materials R&D," explained Zhang Peiyu, chief scientific officer at XtalPi. "This approach allows us to accumulate high-quality data and industrial experience while serving global clients, creating a virtuous cycle of technology export, global validation, and capability iteration." With one of the world's largest clusters of "AI + chemistry robots," XtalPi serves over 20 global pharmaceutical companies, collecting high-quality data 50 times more efficiently than traditional labs.

With the advancement of AI, Chinese enterprises are shifting from exporting technology products to exporting technical service capabilities. A new frontier in this area is "token exports." Tokens, the fundamental units of information processed and generated by AI, are digital outputs derived from computing power. Chinese companies are now packaging their mature large-model computing capabilities into standardized interfaces, allowing overseas clients to access them without building their own infrastructure. This efficient model is gaining traction among international businesses, with many overseas startups in programming, content creation, interactive entertainment, and AI-native gaming adopting Alibaba's Qwen large model as their technical foundation, building brand trust within the global developer community.

Cultivating More "Service from China" Brands

The growth in service exports reflects the rising recognition of "Service from China" brands. Chinese service brands are accelerating their overseas expansion, introducing their consumer concepts and cultural elements to the world. Mixue Bingcheng's global journey is a prime example. By implementing a "global standard + regional customization" strategy—offering acai ice cream in Brazil, various sweetness levels in the US, and tropical flavors in Southeast Asia—the tea chain has successfully integrated into local lifestyles, operating over 4,000 stores across Indonesia, Vietnam, Malaysia, and Thailand.

Chagee, another tea brand, focuses on creating unique spaces and scenarios. In the Philippines, it has opened pet-friendly stores in areas known for such amenities, while its Gangnam flagship store in Seoul, South Korea, features soft fabrics and greenery to offer busy urban customers a "serene oasis."

These examples illustrate a shift in how Chinese brands go global—moving beyond market coverage to forge emotional connections with local consumers. Traditional services are also enhancing their quality and efficiency. In April, a pilot program for the integrated development of traditional Chinese medicine (TCM) consumer services and trade was launched across 18 regions, including Beijing, Tianjin, and Hulunbuir. Over the next three years, these areas will explore innovations in cultural exchange, tourism routes, health and wellness services, and dietary therapy, aiming to meet the diverse needs of the international wellness market and create a new ecosystem for TCM services.

From the surge in travel services to the advancement of knowledge-intensive offerings and the global push of Chinese brands, these trends paint a clear picture of the transformation and upgrading of China's services trade. As the sector opens up further, Chinese services are poised to participate in the global division of labor in more diverse forms, continuously unlocking new growth momentum.