As China charts its course through the intricacies and uncertainties of the global trade climate, the emphasis on expanding trade in services is gaining increasing importance, particularly in harnessing the immense potential of knowledge-intensive services and digital transformation, analysts said on Monday.

However, the sector still faces a host of challenges stemming from structural imbalances, discrepancies between some regulatory standards and established international norms, and further fine-tuning of foreign investment access, they added, calling for greater efforts to strengthen weak links.

In the first half of the year, China's trade in services maintained robust growth momentum, with the total volume of service imports and exports reaching about 3.6 trillion yuan ($501 billion), up 14 percent year-on-year, the Ministry of Commerce said on Friday.

Of the total service trade volume, exports accounted for 1.47 trillion yuan, an increase of 10.7 percent compared with the same period last year, while imports climbed 16.4 percent year-on-year to 2.13 trillion yuan, according to the ministry.

In contrast to goods trade, trade in services refers to the sale and delivery of intangible services like transportation, tourism, telecommunications, warehousing, advertising, computing and accounting.

Zhou Nianli, a professor of foreign trade at the University of International Business and Economics in Beijing, said that despite notable progress, the representation of services in global trade metrics falls far short of their domestic significance.

The tertiary sector, another term for the service sector, accounted for 56.7 percent of China's total GDP in the first half of the year, according to the National Bureau of Statistics, while cross-border services trade, as shown by data from the ministry, only accounted for 22 percent of total global trade volume last year.

Zhou said that recognizing and harnessing the latent potential of service trade is crucial for unlocking new avenues of growth in the international trade landscape, especially as economies worldwide pivot toward knowledge-intensive and digitally driven models.

During the January-June period, the exports and imports of knowledge-intensive services totaled 1.42 trillion yuan in China, registering 3.7 percent year-on-year growth, according to the ministry.

Xie Yiqing, an associate researcher at the Shanghai Academy of Social Sciences' Institute of China Studies, said that knowledge-intensive services, which represent around 40 percent of China's total service trade volume, still fall below the levels commonly observed in developed economies.

Most of the knowledge-intensive services are digital deliverable services, Xie said, emphasizing that the country should leverage digital technologies to strengthen its foothold in knowledge-intensive services, and nurture new growth drivers and advantages within the sector.

Meanwhile, the application of digital technologies in traditional service sectors such as travel, transportation and construction could also elevate the overall volume and quality of service trade offerings, Xie added.

Efforts to bridge the gap between regulatory frameworks and international standards are essential to enhance the competitiveness and attractiveness of China's service trade offerings on the global stage, analysts said.

Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation, said that China's pursuit of accession to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and the Digital Economy Partnership Agreement serves as a pivotal opportunity for the country to align with best practices and enhance its digital trade policies.

In addition, China should continue its drive toward greater openness in the service sector, in order to further relax restrictions on foreign investment in the sector, Bai said.

Using free trade zones as testing grounds for service trade initiatives will allow China to tailor its strategies of regional strengths and development levels, Bai said, adding that by trimming the negative lists for service trade as appropriate and streamlining regulations, China can boost levels of investment liberalization and facilitation.