Editor's note:?The service sector in China is a key pillar of high-quality economic development. Li Jun, deputy secretary-general of the China Association of Trade in Services, spoke to the 21st Century Business Herald on why China is focusing on its service sector. Below are excerpts of the interview. The views don't necessarily represent those of China Daily.

The service sector, especially producer services and knowledge-intensive services, has become a key driver of high-quality development.

As the middle-income group expands, the demand for high-quality services such as education, healthcare, culture, elderly care, tourism and sports is rapidly growing. Efforts to expand the capacity and improve the quality of services are essentially aimed at restructuring domestic supply and making consumption a genuine driver of economic growth.

Global value chains are being reshaped. Trade in services has emerged as a competitive international arena. Developed economies in Europe and North America have long dominated these global value chains due to their strengths in the service sector.

China, however, has a large deficit in trade in services, which represents both a weakness and an opportunity for growth. The country needs to strengthen its service sector to foster a new development pattern and boost its competitiveness.

Currently, a core theme of China's industrial policies is integrating advanced manufacturing with modern services. A challenge is that the two sectors have long been governed by different policies, statistical methods and regulatory frameworks, creating barriers to integration.

To overcome these barriers, efforts are required to utilize the industrial internet to connect data silos. It is necessary to accelerate the cloud migration of manufacturers' data on production, equipment and orders and attract service companies to develop services tailored to specific needs based on such data.

Statistical standards also need to be improved. Currently, service departments of manufacturing companies, such as R&D, design and logistics, are still classified under the manufacturing sector. This underestimates the scale of the service sector and limits its ability to benefit from favorable policies.

Additionally, manufacturing companies should be given more support to transition from merely providing products to also offering services and solutions. The global service industry is undergoing an important change, with artificial intelligence and the green economy driving trade in services. This presents a strategic opportunity for China to boost its trade in services.

The green transition has led to the emergence of a range of new businesses. Global market demand for services such as carbon verification, carbon asset management and environmental, social and governance consulting is expanding rapidly. China can leverage its experience in new energy, energy storage and green building by exporting green services.

Artificial intelligence is transforming trade in services by reducing the marginal cost of knowledge-intensive services, and making it easier for companies to offer services that used to be highly demanding for providers. This transition has empowered small and medium-sized Chinese companies to export their services globally.

More importantly, China is exporting AI technology, such as large AI models and intelligent applications. These goods will be key growth drivers of knowledge-intensive service exports during the 15th Five-Year Plan (2026-30) period.