By Shi Guang, Research Institute of Finance, DRC

Research Report, No.163, 2018 (Total 5438) 2018-9-30

Abstract: The knowledge-intensive service industry is developing rapidly in China, but it is still lagging behind the GDP growth and its relative position in the world has improved slower than that of manufacturing in general. China’s international trade surplus of knowledge-intensive service is favorable across the board, but its competitiveness is not strong. The surplus mainly comes from business service which is relatively scattered and diversified, while both the finance and information services have trade deficits. The royalty of intellectual property is an important source of service trade deficit in China. Among all categories of knowledge-intensive service sector, the finance and information services are more advanced in terms of development, while the healthcare and business services are lagging behind. The process of “strengthening weak links” will promote the rapid growth of knowledge-intensive service sector in China. The service sector will be upgraded towards the knowledge-intensive direction. Finance and information services are expected to keep on expanding in size in the future; whereas their relative share may gradually decline as healthcare and business services are expected to grow faster. Some measures like deregulation and relaxing the market access will effectively boost international competitiveness of the service sector in China.

Key words: knowledge-intensive service industry, intellectual property royalties, international comparison