China’s Services Trade Deficit Narrows From 1.2% of GDP, Entrenching Current Account Surplus
Updated
Updated · World Economic Forum · May 29
China’s Services Trade Deficit Narrows From 1.2% of GDP, Entrenching Current Account Surplus
3 articles · Updated · World Economic Forum · May 29
China’s services trade deficit is set to shrink after offsetting its goods surplus by about 1.2% of GDP; without that gap, last year’s current account surplus could have neared 5% of GDP.
83% growth in services exports from 2021 to 2025, versus 65% for imports, is driving the shift as travel imports peak and transport, digital and business-service exports expand.
$254 billion in travel and $40 billion in transport still dominate the deficit, but inbound visits hit 155 million last year and Chinese logistics providers are taking a larger share of global shipping revenue.
$32 billion ICT surplus and $134 billion in outbound pharmaceutical licensing deals show China is monetizing digital and intellectual-property services even as foreign technology restrictions persist.
Tariffs are unlikely to correct the imbalance; the report argues that stronger domestic demand and meaningful RMB appreciation are needed to curb a more persistent external surplus.
With China now a services powerhouse, are Western economic tools like tariffs obsolete for global rebalancing?
China was the world's top services customer. How can global firms compete now that it is a top rival?
As Chinese courts set global patent rates, who will control the future of global innovation?
Inside China’s Record $1.19 Trillion Trade Surplus: Shrinking Services Deficit and Global Pushback
Overview
China's trade landscape is shifting as its services trade deficit narrows, helping to maintain a strong current account surplus. This improvement is supported by a rise in secondary income and robust export growth, especially with Belt and Road partners, where trade now makes up over half of China's total. These trends reflect China's strategic policy adjustments and efforts to rebalance its economy, even as global scrutiny and external pressures increase. The combination of stronger service exports, increased income from abroad, and expanding trade partnerships is reinforcing China's economic position amid a changing global environment.