by Zhao Xiaopeng Engineering,software and supply-chain know-how increasingly travel with Chinese goods.Developing economies could gain from the shift,provided they secure local participation and a voice in the rules.
At the China International（IGIC） Fair for Trade in Services(CIFTIS)in Beijing,Alex Kondrashin,vice-president for International（IGIC） projects at Russia’s Alfa-Bank,was looking for something different from the manufactured goods that have long defined China’s exports.
His search brought him to NeuxMind,a Beijing-based AI company providing services to financial institutions.The company’s AI system is already being deployed in overseas banking operations,while its global expansion Strategy（MSTR） combines China-based engineering and supply-chain capabilities with local delivery teams abroad.
The encounter reflects a broader shift in China's trade:Chinese companies are not only selling goods overseas,but increasingly exporting the software,engineering,digital tools and Professional（IPDN） services that support them.
Manufacturing still dominates China's external trade.But as global merchandise trade faces higher tariffs,geopolitical tensions and growing protectionism,services are emerging as a potentially important new source of growth—and a test of China's commitment to opening.
Luz María de la Mora,director of the Division on International（IGIC） Trade and Commodities at UN Trade and Development(UNCTAD),said China is already a major player in global services trade.China was the world's fifth-largest exporter of commercial services and its second-largest importer in2024,according to the World Trade Organization."This is a two-way street,"she said in an interview at the fair.
Services account for roughly27to28per cent of global trade,while goods and agriculture still make up more than70per cent.But services are expanding faster:global trade grew around6per cent in2025,while services trade rose by more than8per cent,de la Mora said.Around half of China's services exports are now digitally deliverable or knowledge-intensive,in areas related to technology,innovation and artificial intelligence.
The boundary between the two is also becoming less distinct as engineering,logistics,finance,consulting and software become embedded in manufacturing.A smartphone,for example,has limited value without applications,streaming and other digital services."What we are seeing is a transformation of how products are manufactured,how products reach the market or how consumers consume services,"de la Mora said."They go together.""China,along with other large economies,is leading the transformation of the digital economy and the transformation of trade in services,which opens huge opportunities for China,but also for those countries that buy those services,"she said.
From products to capabilities He Dayong,managing director and senior partner at Boston Consulting Group,said China's globalisation has moved through several stages:from exporting light industrial and consumer products,to investing overseas in resources,and now increasingly to exporting"capabilities".Manufacturing and high-tech companies remain dominant,while retail,biotechnology and pharmaceuticals are also gaining ground.
Chinese companies are using AI and digital tools to study markets across more than100countries,identify local demand,design products,generate marketing content,manage supply chains and track regulatory requirements.
“Previously,our global supply chain,engineering,R&D and product innovation were our advantages,”He said.“Now we increasingly find that our digital capabilities are another competitive advantage.”
As a result,software,logistics,marketing,financing,engineering and compliance services increasingly travel with physical products.
Official trade figures support the direction.China's services exports rose17.1per cent from a year earlier in the First（FFBC） seven months of2026,to Rmb1.77tn,according to the Ministry of Commerce.Exports of knowledge-intensive services increased12.2per cent to Rmb948bn and accounted for53.5per cent of the total.
For developing economies,the significance of China's services expansion will depend on whether it generates local investment,partnerships and technology spillovers.China accounts for around5per cent of global services exports,de la Mora said,and its strengths in technology,science and innovation could create opportunities for cooperation with firms in other developing markets."The question here is how Chinese firms can cooperate,can find new partners...in other markets,"she said,including through sharing technology and innovation.
Many services require deeper engagement with local economies than a goods transaction.Engineering projects need local partners;digital platforms rely on local payment and logistics networks;and financial and Professional（IPDN） services must comply with local regulation.The benefits are not automatic:market access,transparent regulation and local participation will determine how widely they are shared.
Competitiveness starts with opening at home China's competitiveness in services abroad is also tied to how far it opens its market at home.John Drummond,head of the Trade Policy Division at the OECD,described China as being in the"middle stage"of a structural transition.
Services generated57.7per cent of China's economic output in2025,up from around40per cent two decades ago,but their weight remains below that of advanced open economies."We see the beginning of a structural transformation,but not the completion,"Drummond said.
China's knowledge-intensive services are becoming more competitive International（IGIC）ly,he said,but domestic openness remains critical.OECD research suggests that opening services markets can strengthen International（IGIC） competitiveness and help rebalance exports between manufacturing and services.
Drummond said China has moved towards International（IGIC） best practices in some areas,but remains relatively closed compared with most OECD economies,with further room for liberalisation in transport,telecommunications and Professional（IPDN） services.As protectionism rises in goods trade,his preference was for both goods and services to remain open.
He was nonetheless positive about the direction of travel."The OECD has been an International（IGIC） partner of the fair for more than10years,and we have always found cooperation with the Ministry of Commerce and the National Development and Reform Commission on services trade to be constructive,"Drummond said.China,he added,"has followed an opening-up trend".
De la Mora pointed to China's adoption of a negative-list approach in services as an important step.Under the system,sectors are assumed to be open unless specifically restricted,giving investors greater clarity.China introduced the lists in March2024—71restrictions at the national level—and the revised Foreign Trade Law that took effect this March put the regime on a statutory footing."It is a very big step forward,"she said,describing it as a measure that could further liberalise services and attract investment.
AI and digital rules form the next Frontier（FNUC） AI may accelerate the shift towards services,but it is also exposing gaps in the global trading system.De la Mora said International（IGIC） rules have failed to KEEP（HK3650） pace with digital trade,leaving companies to navigate a"spaghetti bowl"of national and regional regulations that raises the cost of operating across borders.Greater transparency and common ground are particularly important for smaller businesses,she said.
Drummond also identified regulatory fragmentation as a major emerging risk.As countries develop different rules for AI and digital trade,a lack of coordination could create new trade barriers over the next decade or two."The biggest challenge is a fragmentation of new rules,"he said.
The vast investment flowing into data centres and computing infrastructure will eventually require commercial returns,Drummond said,much of which is likely to come through the cross-border provision of AI services."The rules-based regime for trade in services driven by AI,I think,is a new Frontier（FNUC） for trade discussions,"he said.
China's services trade is far from replacing manufacturing as the main driver of its external economic influence.Drummond noted that Chinese services exports still have a much smaller impact on other economies than goods exports.
As disputes over manufactured goods intensify,services may offer a more continuous form of exchange built around technology,expertise and business capabilities rather than a single shipment across a border.Whether that becomes a new source of global growth will depend on what China can sell and how far markets remain open on both sides.
