China moving into the Service Sector

[retaxis]

The logo of the 2026 China International Fair for Trade in Services stands outside of the Shougang Convention & Exhibition Center, Beijing, capital of China, September 13, 2026. /VCG
The 2026 China International Fair for Trade in Services (CIFTIS) wrapped up in Beijing on Sunday with more than 1,200 outcomes, underscoring the growing role of technology and knowledge-intensive services in China's rapidly evolving service trade.

Over five days, more than 1,830 companies and institutions exhibited on site, while more than 116,000 professional visitors registered for the event, up 3.7% year on year. By noon on Sunday, the fair's core exhibition area had recorded nearly 420,000 visits, a 36.6% increase from the previous edition.

The fair also hosted around 200 forums, business matchmaking sessions and promotional events. In total, more than 1,200 outcomes were achieved across seven categories, including six cooperation agreements signed between the Norwegian delegation, this year's guest of honor, and Chinese companies and institutions.

Beyond the numbers, the event offered a glimpse into a broader shift in China's service trade – from traditional, labor-intensive services toward technology-driven solutions, and from simply exporting products to providing services and expertise to overseas markets.

From products to services

A major highlight of this year's CIFTIS was the debut of an exhibition area dedicated to cases of "Chinese services," showcasing how Chinese companies are moving beyond product exports to deliver services tailored to international markets.

One example was an overseas service platform based on China's BeiDou Navigation Satellite System. The platform represents a shift from exporting BeiDou-related equipment to providing operational services, helping countries develop their digital infrastructure.

Another featured product was a domestically developed welding robot that can be used in high-risk environments such as shipbuilding, offshore engineering and nuclear power. Rather than simply selling equipment, the company also provides customized solutions and supporting services based on the needs of different overseas markets.

In addition, of the more than 140 innovative cases showcased in the new exhibition area, nearly 40% were centered on artificial intelligence, large language models and AI agents. Visitors also experienced emerging services including AI-assisted medical care, intelligent question-and-answer systems and services designed to support healthy aging, highlighting a shift in what China exports.

In the past, China's service trade was more closely associated with sectors such as tourism, transportation and business-process outsourcing – areas that tend to rely heavily on labor and resources. CIFTIS 2026, by contrast, highlighted a growing competitive edge in technology-enabled, knowledge-intensive services, with AI, digital technologies and scenario-based innovation becoming increasingly important.

Official data show that in the first half of 2026, China's exports of AI-related products exceeded $480 billion, up 47.3% year on year. Exports of knowledge-intensive services surpassed 800 billion yuan ($119 billion), accounting for 53.5% of total service exports.

Henning Kristoffersen, commercial counselor at the Norwegian Embassy in China, said China's rapid technological development and its innovation ecosystem had left a deep impression on him.

"What is impressive about China is the amazing speed of high-tech development," he said, noting that China's service offerings are also upgrading across consumption, technology and production.

Visitors experience smart driving at an exhibition area in the Shougang Convention & Exhibition Center, Beijing, capital of China, September 13, 2026. /VCG
Supporting Chinese companies going global

This year's CIFTIS also sought to strengthen the services that help Chinese companies expand overseas. For the first time, the fair established a dedicated area for roadshows and promotional activities focused on helping companies go overseas.

More than 40 sessions were held by professional service providers in fields ranging from finance, law and accounting to intellectual property, advertising and human resources.

The aim was to bring together services that companies previously had to seek separately, creating a more integrated support system for businesses entering international markets.

In recent years, Chinese companies have been expanding their presence in global markets, making service support increasingly important.

Zhou Mi, a researcher at the Chinese Academy of International Trade and Economic Cooperation, said China needs to cultivate more globally competitive service providers with a strong understanding of target markets and international rules.

At the government level, he said, China should further strengthen the alignment between domestic and international rules, including those under the World Trade Organization's framework for trade in services and bilateral free trade agreements.

Such efforts could help Chinese companies reduce the costs of entering overseas markets and adapt more effectively to different regulatory environments, Zhou said.

He also stressed that China is not focused solely on exports, but on ensuring that imports and exports complement each other. He said China's current trade structure supports its goals of promoting green, low-carbon and smart development globally, while China's economic growth will also create more opportunities for the rest of the world.

 

[retaxis]

China going from Agriculture -> Manufacturing -> technology dominance and service sector.

Give it a few years and China will dominate the semiconductor chips with home grown EUV machines. Things will really start popping off then.

 

[retaxis]

China's service sector is expanding rapidly, exceeding 80 trillion yuan (about $11.65 trillion) in added value and making up 57.7 percent of the country's total GDP. [1]

Key Economic Numbers

• • GDP Share: The service sector generated 61.4 percent of all economic growth in recent official data.
  • Employment: The industry provides about half of all jobs across the country.
  • Trade Volume: Total trade in services reached nearly 4.45 trillion yuan ($663 billion) in the first seven months of 2026, marking an 8.3 percent increase from the previous year.
  • Global Ranking: China ranks second globally with 21 entries in the top 100 most valuable trade-in-services brands. [1, 2, 3]

Main Growth Drivers

• • Producer Services: The government is pushing for higher specialization in business-to-business fields like finance, modern logistics, and information technology to support advanced manufacturing. [1, 2]
  • Consumer Services: Domestic spending on services is rising, driven by green consumption, travel, and local community life circles that offer better elderly care and childcare. [1, 2]
  • Digital Trade: Digital services like cloud computing and data processing are growing strongly, as detailed in reports from Xinhua and exhibitions featured by Markets Insider. [1, 2]

 

[Nan Yang]

China’s inbound tourism revenue projected to reach US$470 billion by 2040: UBS​

Country’s inbound travel revenue forecast to double share of economy and capture 15 per cent of global holiday market, Swiss bank says​

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China’s inbound tourism revenue projected to reach US$470 billion by 2040: UBS​

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Country’s inbound travel revenue forecast to double share of economy and capture 15 per cent of global holiday market, Swiss bank says​

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Ralph Jennings​

Published: 7:00pm, 14 Sep 2026​

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Revenue from inbound travel to China is forecast to reach US$470 billion by 2040, more than doubling its current share of the economy and helping offset weak domestic demand, according to UBS.​

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Tourism from outside mainland China would expand to 1.5 per cent of gross domestic product (GDP) on a compound annual growth rate of 8.9 per cent from 2025, the Swiss investment bank estimated.​

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China’s inbound travel revenue would represent 15 per cent of the world tourism market by around 2040, said Chen Xin, head of China leisure and transport research at UBS, in a special report summary on Friday.​

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“Amid weak domestic demand, policymakers increasingly see inbound tourism as an incremental consumption driver,” the report said.​

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China, aiming to stimulate its economy, has opened visa-free travel in stages since 2023 to about 50 countries including Australia, Russia, Singapore and most of Europe.​

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The list of visa-free countries had expanded by 188 per cent compared with pre-2023, UBS said. International flight capacity for China trips could increase by about 150 per cent from last year through 2040.​

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China offered “competitive travel costs”, the bank said.​

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UBS expected a “spending mix upgrade” among inbound arrivals, with accommodation, catering and shopping at an estimated 78 per cent of their spending by around 2040, up from 51 per cent in 2019.​

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Tax-refund “optimisation” and stronger domestic brands should drive more shopping among foreign tourists, alongside a growing supply of mid- to higher-end hotels and a broader calendar of international events, UBS said.​

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“A key investor debate is whether the opportunity is large enough to move domestic consumption and travel-related earnings,” the report said.​

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“We see the clearest read-through for airports, hotels, premium malls and online travel agencies, where incremental foreign traffic can support topline growth and international travellers’ per-passenger spending is likely to be higher than that of domestic tourists.”​

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The report said China appeared “structurally well positioned to capture a larger share of global travel spending, supported by its rich tourism resources, competitive travel costs and improving accessibility”.​

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UBS forecast a 4.7 per cent compound annual growth rate for the number of inbound travellers by 2040, with per-capita spending growth at 4 per cent.​

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Domestic travel is expected to grow at 4.8 per cent annually from 2025 through 2040, it forecast.​

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Local consumption has come under pressure in China from a prolonged downturn in the property sector and a tough labour market.​

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