China's moves to widen opening-up in the services sector will sustain its economy and cultivate new competitive advantages of trade in services in 2023, said market observers and business executives.

Their remarks came after the State Council, China's Cabinet, approved the launch of a three-year comprehensive pilot project to expand opening-up in the services sector in six cities, including Shenyang, Liaoning province; Nanjing, Jiangsu province; and Hangzhou, Zhejiang province.

The project aims to accelerate the growth of the modern services sector, create new advantages in international competition and cooperation, and speed up the construction of new development patterns, according to a circular released by the State Council last week.

As the restructuring of the global value chain is accelerating, service businesses including innovation activities, finance, logistics, marketing and branding have all become more prominent in both global and domestic economic growth, said Lin Meng, director of the Modern Supply Chain Research Institute, which is part of the Chinese Academy of International Trade and Economic Cooperation in Beijing.

With the added value of the services sector soaring rapidly, Lin said that the government's efforts to bolster new formats of foreign trade, conduct policy trials at its pilot free trade zones and ease market access for foreign companies have all spurred the growth rate of trade in services in recent years.

In contrast to merchandise trade, trade in services refers to the purchase and sale of services. According to the World Trade Organization's definition, trade in services covers 12 major sectors. These include commerce, communication, construction and related engineering, finance, entertainment, culture, sports, tourism, education and the environment.

Fueled by continuous opening-up and digitalization of trade in services, China's services trade value grew 17.2 percent year-on-year to nearly 4.92 trillion yuan ($705.5 billion) in the first 10 months of 2022, said the Ministry of Commerce.

In the meantime, the country saw its services exports expand 18.1 percent year-on-year to 2.36 trillion yuan, and services imports amount to over 2.56 trillion yuan, up 16.4 percent from the same period a year ago.

Despite global companies' investment strategies having long focused on global-scale supply chains and leveraging China's advantages, many of them have already begun to deploy new resources in innovation, logistics and digital solutions in China to boost two-way trade in services, said Sun Xiao, secretary-general of the Beijing-based China Chamber of International Commerce.

China's services industry saw the inflow of foreign direct investment grow by 0.9 percent year-on-year to 842.61 billion yuan in the first 11 months of 2022, while that in the high-tech services sector rose 23.5 percent on a yearly basis, said the Ministry of Commerce.

FedEx Express, a United States-based express courier service provider, said it will continue to expand its service network in the country to more second and third-tier cities in the coming years, after having established a new operations center for South China at its Asia-Pacific hub at Guangzhou Baiyun International Airport in July.

"We will actively cooperate with the government and business partners, continue to optimize our logistics network, improve logistics efficiency, ensure the stability of the supply chain with efficient services, as well as continue to promote China's position in the global value chain in 2023," said Eddy Chan, senior vice-president of FedEx Express and president of FedEx China.

The Ministry of Commerce announced earlier this month that a total of 55 participants, including China, the US and the European Union, have completed the domestic approval procedure of the Joint Statement Initiative on Services Domestic Regulation under the framework of the World Trade Organization.

This will advance liberalization and facilitation of global trade in services, and further unleash the potential of trade in services in China, said Zhang Wei, chief researcher of the Beijing-based China Association of Trade in Services.

The WTO estimated that the share of services in international trade will rise from 22 percent to more than 33 percent in 2040.