Official data from the Ministry of Commerce reveals that the total value of China's service imports and exports reached 3.78 trillion yuan in the first half of the year, marking an 8.3% increase year-on-year. Notably, service exports surged by 17.6% to 1.5 trillion yuan, while the service trade deficit narrowed by 161.4 billion yuan to 770.35 billion yuan compared to the same period last year.

These figures highlight a profound shift in the global trade landscape, with the deep development of service trade and cooperation emerging as a new growth driver. They also reflect the enhanced quality and efficiency of China's service industry, which saw its added value climb 5.2% year-on-year, accounting for 59.5% of the country's GDP and solidifying its position as the largest sector of the national economy. To understand the emerging trends and highlights in China's service exports, we delve into the latest developments.

Travel Services Lead Export Growth

In the first half of the year, China's travel service exports hit 229.2 billion yuan, a robust 31.1% increase year-on-year, making it the fastest-growing segment among the top five service export categories. Travel services encompass tourism, study abroad, and medical visits, with all expenditures by inbound visitors on accommodations, dining, transportation, entertainment, and shopping counted as travel service exports.

Recent policy optimizations, including visa-free entry and tax refunds for departing tourists, have fueled sustained activity in "China Travel" and "China Shopping." Starting July 1st, the national "small-amount random inspection system" for departure tax refunds was implemented, applying random checks to refund applications under 10,000 yuan instead of physical verification for each transaction. Self-service tax refund machines at Shenzhen's Luohu Port and airport now support 13 languages, processing refunds in as little as two to three minutes. In the first month of the policy, Shenzhen Customs processed 13,000 departure tax refund verifications, involving 170 million yuan in applications, representing increases of 2.2 times and 94.1% year-on-year respectively.

According to officials at Shenzhen Customs, overseas visitors are diversifying their purchases beyond traditional souvenirs like tea and silk to include domestic digital products and fashion items. As "China Travel" deepens, foreign tourists are venturing beyond first-tier cities like Beijing, Shanghai, Guangzhou, and Shenzhen to lesser-known destinations. Qunar Travel data shows that in the first half of the year, inbound flight bookings on the platform covered 160 domestic cities—from Heihe near the China-Russia border in the north to tropical Sanya in the south, from Jiamusi, the easternmost point of China, to Kashgar in the west—adding 20 new cities compared to last year.

The duration of inbound trips is also lengthening. Tujia Homestay data indicates that foreign guests stayed at homestays across 330 Chinese cities in the first half of the year, with an average stay of 2.8 days, up about 10% year-on-year. During this summer, the average stay extended to 4.7 days. "Many foreign tourists now want to explore China's small towns, communities, and villages, meeting hosts and experiencing local life firsthand. They're spending more time to see a more authentic and diverse side of China," said Hu Yang, Senior Vice President of Tujia Homestay.

"China is fantastic. I strongly recommend everyone go see it," wrote Elon Musk, CEO of Tesla, on social media recently. His mother, Maye Musk, echoed the sentiment, noting that "every city in China has its unique charm." From visiting and experiencing to falling in love with China, inbound tourism is increasingly integrating with consumption and culture, becoming a new pillar of service trade growth.

Knowledge-Intensive Services Surpass Half of Exports

Another bright spot in service trade growth is the expansion of knowledge-intensive service exports, which reached 805.67 billion yuan in the first half, a 12.8% increase year-on-year, accounting for 53.5% of total service exports. XtalPi, a global leader in AI-driven drug discovery, delivered intelligent, automated robot laboratories for drug discovery and process optimization to South Korea's leading pharmaceutical company JW Pharmaceutical. The company also achieved key progress in strategic cooperation with an innovative US biopharmaceutical firm and secured an AI drug discovery partnership worth over $400 million with an international pharmaceutical giant.

"We transform our proprietary AI algorithms, tools, processes, and automated laboratory capabilities into standardized, deliverable solutions for pharmaceutical and materials R&D. By serving global clients, we accumulate high-quality, industry-scarce data and commercialization experience, creating a virtuous cycle of technology export, global validation, and capability iteration," explained Zhang Peiyu, Chief Scientific Officer of XtalPi. The company operates the world's largest "AI + chemistry robot" cluster, serving multiple top-20 global pharmaceutical companies and collecting high-quality data 50 times faster than traditional laboratories, accelerating the clinical translation of innovative drug projects.

With the advancement of AI and other new technologies, Chinese enterprises are transitioning from exporting technology products to exporting technical service capabilities. Among these, "token export" is a new track emerging in recent years. Tokens are the basic units of AI processing and information generation, representing digital output from computing power and electricity—a crucial foundational resource in the AI era. Chinese companies are packaging mature domestic large-model computing power into standardized interfaces that overseas clients can access directly without building their own infrastructure. This lightweight and efficient model of token export is gaining favor among an increasing number of overseas businesses. In fields such as programming, video creation, interactive entertainment, and AI-native gaming, many overseas startup teams are adopting China's Alibaba Qwen large model as their technical foundation. Its model capabilities, cost advantages, and mature cloud service system have established brand trust within the global developer community.

Cultivating More "China Service" Brands

The growth in service exports reflects the rising recognition of the "China Service" brand. In recent years, Chinese service brands have accelerated their overseas expansion, bringing with them consumer concepts and cultural elements that are gaining appreciation worldwide. The journey of a single tea beverage brand illustrates the broader internationalization of Chinese brands. Mixue Bingcheng, which operates over 4,000 stores in Southeast Asian countries including Indonesia, Vietnam, Malaysia, and Thailand, adopts a "global standards + regional customization" model. It offers açaí ice cream in Brazil, various sugar level options in the United States, and local tropical flavors in Southeast Asia, respecting and integrating into local cultures to bring Chinese tea drinks into everyday life.

Chagee, meanwhile, focuses more on space creation and scenario expansion. The brand has opened pet-friendly stores in pet-friendly districts in the Philippines, while its flagship store in Seoul's Gangnam district features softer fabrics and green plants, creating a "tranquil oasis" for busy urban customers. From product innovation to scenario extension, the approach of Chinese brands going global is evolving. Companies are not only focusing on market coverage but also on building emotional connections with local consumers.

Traditional services are also accelerating their quality enhancement. In April, a pilot program for the integrated development of traditional Chinese medicine (TCM) service consumption and trade was launched, covering 18 regions including Beijing, Tianjin, and Hulunbuir in Inner Mongolia. Over the next three years, these pilot areas will explore innovations in TCM cultural exchanges, promotional tours of TCM routes, health and wellness services, and dietary therapy offerings. The goal is to meet the multi-level demands of the international wellness market, create new scenarios and business formats for TCM service consumption, and cultivate a number of renowned international TCM service brands.

From the growth in travel services to the enhancement of knowledge-intensive services and the accelerated global expansion of Chinese brands, these data points trace the trajectory of China's service trade transformation and upgrading. As the service sector opens ever wider to the outside world, China's services will participate in global division of labor in more diverse forms, continuously activating new development momentum.