China's deficit in services trade expanded to a record 1.7 trillion yuan ($250 billion) in 2018 as Chinese people spent more on overseas trips, transportation and intellectual property rights.
China’s 2018 exports of services grew 14.6% year-on-year to 1.77 trillion yuan, the biggest annual expansion since 2011. Imports expanded 10% to 3.47 trillion yuan, according to the Ministry of Commerce.
Growing expenditures on travel abroad contributed the most to the widening of China’s service trade gap, accounting 81.4% of the deficit. Spending on transportation and intellectual property rights were also significant contributors. However, imports of traditional services such as construction have slowed, according to official data.
Guan Tao, a former director of the international payments department at China's State Administration of Foreign Exchange, said the figures signaled Chinese people’s expanding consumption needs and demand for higher-end services.
While China maintained a strong surplus in goods trade, the country’s services trade has long run a deficit. Guan said the widening of the services deficit reflects the need for China to adjust its economic structure and improve its services trade competitiveness.
Support independent journalism from China. Subscribe to Caixin Global starting at $0.99.