China’s Service Trade Deficit Drops for First Time in Five Years

Text of report in English by official Chinese news agency Xinhua (New China News Agency)

Beijing, 19 November: In the first half of this year, China’s service trade deficit totalled 3.9bn US dollars, down 33 per cent year on year.

This is the first time for China’s service trade deficit to decrease in five years, according to sources with the ongoing seminar on China’s business development.

But due to the limited growth of China’s competence in high- added-value service industry, the deficit will not vanish in the near future, analysts said.

In the first half year, China’s service trade volume reached 73bn US dollars, with income growing 31 per cent to 34.5bn US dollars and expense rising 19 per cent to 38.5bn US dollars.

China’s service trade deficit is mostly in area of transport and insurance, while surplus is mostly in area of tourism, entrepot trade, tenancy and commission.

In the first half year, China’s cargo export rocketing pushed forward the rapid growth of its transport and insurance income, reducing the deficit in these two areas remarkably.

Meanwhile China’s income from international tourism also soared, which has become the most important factor to shrink service trade deficit.