China's service trade imports and exports registered a record high in 2018 as China rolls out an array of measures to promote the innovative development of service trade.

In 2018, China's service exports gained 14.6 percent year-on-year to stand at 1.77 trillion yuan (260 billion U.S. dollars), the biggest expansion since 2011. While service imports increased by ten percent year-on-year to 3.47 trillion yuan, resulting in a deficit of nearly 1.7 trillion yuan, data from the Ministry of Commerce showed Tuesday.

Although the growth rate of service exports overtook imports, China's service trade ran a deficit in 2018 and secured the second place in the world for five consecutive years.

As the domestic service market expands, exports of production service sectors such as design and consumption service sectors such as entertainment can be boosted through "home market effects", Luo Libin, director of International Trade Department from Beijing International Studies University told Economic Daily.

The first three quarters of 2018 saw insurance services, telecommunications and information services grow by over 20 percent. In recent years, as traditional Chinese financial institutions increased their internationalization and artificial intelligence R&D, industrial design and bio-technology services gained stronger global competitiveness. The export growth rate of high-tech service sectors is markedly higher than overall growth rate.

Service trade structure has been improved with the imports and exports of knowledge-intensive service including computer and information services, intellectual property rights and audiovisual products licensing fees expand 20 percent to hit 1695.2 billion yuan. However, imports and exports of traditional services such as tourism and construction have slowed.

Spending on intellectual property rights saw a marked increase with imports and exports gaining 22 percent and 14.4 percent respectively.

Demand for high-end production services and export competitiveness saw a synchronized growth, which signals China's strong demand for high-end production services and rising competitiveness of high-end production services exports.

Service trade statistics over 2008-2018 demonstrated a change in China's trade sector. From 2012 to 2018, China has been the world's largest outbound tourism consumer for six years in a row. Although consumption made by Chinese tourists in 2017 accounted for 20 percent of the world's total, the growth rate of China's tourism service imports slowed down and this downward trend has continued into 2018.

Research from China Tourism Academy showed that the annual expansion rate of outbound visits has dropped to single digits. As tourism service import has been a significant contributor to service trade import, its falling growth rate will drag down the overall growth rate.