Developing service trade to enhance the global competitiveness of Chinese industries
The outline of the 15th Five Year Plan proposes to "vigorously develop service trade" and "develop knowledge intensive service trade". Against the backdrop of deep adjustments in the global economic landscape, a new round of technological revolution, and accelerated industrial transformation, service trade, especially knowledge intensive and productive service trade, is no longer the traditional "supporting" role, but has become an important lever for promoting high-quality and efficient development of the service industry and promoting the deep integration of manufacturing and modern service industries. A deep understanding of the new trends in the development of service trade, grasping the role and effects of "service" empowering "manufacturing" from the perspective of the global value chain, promoting innovative development of service trade, will provide solid support for enhancing the global competitiveness of China's industries.
Service trade has become a new highland of international competition
Global trade is expanding from primarily single commodity trade to service trade, and a new round of technological revolution is accelerating the empowerment of the service industry with digital technology. Global service trade is characterized by digitization, platformization, and knowledge intensity. Digital delivery services have become an important component of service trade, and technologies such as cloud computing, artificial intelligence, and blockchain have reshaped the service delivery model, breaking the limitations of geographical boundaries on service trade. Data shows that in 2024, the global service exports reached 8.9 trillion US dollars, a year-on-year increase of 9.9%, becoming an important engine for global trade growth. At the same time, the development of the global value chain is shifting from a manufacturing centered model to a "manufacturing+service" integrated model, and the value-added links of the value chain continue to extend towards both ends of the smile curve. The profit share of upstream R&D design, brand management, and downstream marketing, after-sales service, and other links in the value chain continues to rise, while the profit space of the manufacturing link is further compressed.
Internationally, a few developed economies still dominate global trade in services. The United States has leading advantages in areas such as financial services, software services, and intellectual property licensing; The EU has formed institutional service advantages through high-end engineering consulting, green standard formulation, and other means; Japan embeds industrial software, precision engineering services, and technical consulting into the global manufacturing system to build an integrated service network. These countries prioritize knowledge intensive and productive trade in services in order to gain control over the formulation of international technical standards and institutional rules.
China's service trade is in a stage of parallel development of scale expansion and structural optimization. In 2025, China's service trade will steadily grow, with a total import and export volume of 8082.31 billion yuan, a year-on-year increase of 7.4%. Among them, knowledge intensive service trade maintained growth, with a surplus scale expanding by 158.17 billion yuan compared to the previous year. The export scale of digital services grew strongly, and the trade structure continued to optimize. It should also be noted that although China's service industry ranks among the top in the world, the proportion of service trade volume to total foreign trade is still lower than the global average during the same period, and its empowering role has not been fully utilized. There is still great room for improvement in the strategic value of service trade.
The role and effect of "service" empowering "manufacturing"
Research by international organizations shows that the core of competition in the manufacturing industry has shifted from simple scale expansion to competition in value creation capabilities. Knowledge intensive and productive service industries participate in the intermediate input links of manufacturing, and their efficiency and quality directly affect the added value of manufacturing, which is significantly positively correlated with manufacturing competitiveness. To innovate and develop service trade, we need to understand the role and effect of "service" empowering "manufacturing" from the perspective of the global value chain, and promote China's climb from the low-end to the mid to high-end links of the global value chain.
One is cost optimization. Cost optimization does not refer to the cost compression of a single link, but rather to the systematic reduction of institutional and operational costs throughout the entire manufacturing industry chain and enterprise lifecycle through the deep embedding of productive service industries, promoting the improvement of total factor productivity in the manufacturing industry. With the increasing proportion of investment in information technology, logistics, supply chain financial services, and other intermediate links in the manufacturing industry, the cost of cross-border trade in the manufacturing industry will further decrease.
The second is value chain appreciation. Empowering "manufacturing" with "service" is achieved through high-level opening up of service trade, efficient allocation of high-end service elements globally, extending to upstream R&D and design, core intellectual property, and downstream brand services, digital operation and maintenance, global supply chain management, and breaking through the "low-end lock-in" of the global value chain, achieving a transition from simple processing and assembly to high-end creation.
The third is the enhancement of discourse power. International trade competition is accelerating from traditional competition dominated by tariff barriers to institutional competition dominated by rules and standards. Taking intellectual property rules as an example, developed economies solidify their own technological paths into international standards, forming a strong path dependence in the global market. Later developing economies either pay high patent fees to access existing systems, or build their own standards but face the dilemma of global market incompatibility, which hinders technological catch-up. Currently, in the fields of artificial intelligence infrastructure, electronic design automation, industrial operating systems, etc., it is necessary to accelerate the transformation of independent intellectual property rights into international standards, empower the transformation of scientific and technological achievements with higher quality service supply, and thereby enhance the global competitiveness of China's high-end manufacturing industry.
Explore the path to achieve bidirectional empowerment
Currently, China still has shortcomings in the field of high-end service trade. From the perspective of industrial foundation, some key areas have weak independent and controllable capabilities, and some underlying technologies have a high degree of external dependence; From the perspective of industrial integration, the degree of integration between service trade and high-end manufacturing is relatively low, and manufacturing enterprises generally have the problem of "heavy production, light service". The lack of specialization and low economies of scale in productive service industries constrain the supply capacity of high-end service trade. The service-oriented transformation of manufacturing industry is not only a passive measure to cope with the external competitive environment, but also a strategic choice to develop new quality productivity and shape its own new advantages. During the 15th Five Year Plan period, we need to anchor the development direction of knowledge intensive service trade and productive service trade, continuously explore the practical path of two-way empowerment between service trade and high-quality development of manufacturing industry, and help China transform into a manufacturing and trade powerhouse.
Firstly, focus on high-end manufacturing and optimize the supply of high-end services. Strengthen financial and tax policy support such as structural tax reduction and fee reduction, and additional deduction of research and development expenses, guide manufacturing enterprises to increase investment in research and development design, digital services, etc., promote the steady increase of the proportion of productive service industry investment in the intermediate links of manufacturing, and lay a solid foundation for innovative development of service trade. Focusing on core areas such as high-end industrial software, semiconductors, and industrial operating systems, we will establish a collaborative research and development mechanism of "industry university research application", accelerate the iteration of domestic technology, and build an independent and controllable industrial ecosystem. Build a national level intellectual property operation platform, develop high-end intellectual property services, and enhance the value and international competitiveness of China's intellectual property.
Secondly, deepen institutional openness and align with high standard international economic and trade rules. Further reduce the negative list of cross-border service trade, orderly expand opening up in supporting fields such as industrial Internet, R&D and design, break down hidden barriers, and attract investment from high-quality business entities. Benchmarking against international high standard rules, conducting stress tests in areas such as cross-border data flow, industrial data ownership, and core source code protection, bridging the cross-border flow barriers of service elements such as research and development design, supply chain management, and overseas operations and maintenance, and helping manufacturing enterprises connect with global high-end service resources. Establish a quantitative evaluation mechanism for the contribution of productive service industry to manufacturing added value, technological upgrading, and export competitiveness, improve the statistical caliber of emerging fields such as digital trade, and accurately monitor the effectiveness of service elements embedded in the manufacturing chain.
Thirdly, deepen industrial integration and build a new ecosystem of "manufacturing+services". Cultivate specialized third-party productive service industry enterprises and support equipment manufacturing enterprises to transform into system integration and overall solution providers. Relying on the advantages of advanced manufacturing clusters, we will lay out supporting service clusters such as industrial design and supply chain finance, and create an integrated and symbiotic industrial ecosystem. Build an international cooperation platform to support productive service industry enterprises and manufacturing enterprises to collaborate and go global, and cultivate service trade brands with global competitiveness.