The State Council has approved a plan to deepen pilot projects for the innovative development of the service trade in 28 cities and regions, National Business Daily reported.

Cities and areas covered by the plan are Beijing, Tianjin, Shanghai, Chongqing, Hainan province, Dalian, Xiamen, Qingdao, Shenzhen, Shijiazhuang, Changchun, Harbin, Nanjing, Suzhou, Hangzhou, Hefei, Jinan, Weihai, Wuhan, Guangzhou, Chengdu, Guiyang, Kunming, Xi'an, Urumqi, Xiong'an New Area in Hebei province, Guian New Area in Guizhou province and Xixian New Area in Shaanxi province.

According to the plan, the pilot projects will last three years.

In the wake of a year-on-year decline in China's foreign trade during the first half, imports and exports in service trade, excluding travel service, rose 2.1 percent, showing huge exterior demand and growth potential, said Li Jun, director of the international trade in services institute of the Chinese Academy of International Trade and Economic Cooperation.

In contrast to merchandise trade, trade in services refers to the sale and delivery of intangible products such as transportation, tourism, telecommunications, construction, advertising, computing, and accounting.

In June 2018, the State Council approved a two-year pilot program to deepen pilot projects for the innovative development of the service trade in 17 cities and regions.

"Previously, 17 pilot regions' service trade accounted for more than 70 percent of the total. The expanded service trade pilot project will play an important role in promoting service trade and ensuring stability in foreign investment and foreign trade," Li said.

Among the 11 newly added pilot regions, central and western cities have a relatively high proportion, accounting for more than 60 percent.

Central and western regions have their unique advantage in developing the service trade, Li said. Compared with coastal areas, they have lower cost in land and human resources. In addition, local governments have unveiled measures to attract investment and develop the service trade. With increasing facilitation of transportation and logistics, central and western regions' advantage in developing the service trade have become even more prominent.

China's service trade totaled 2.23 trillion yuan ($315.2 billion) during the January-June period, down 14.7 percent year-on-year, data from the Ministry of Commerce showed. The country's service exports outperformed imports in recent months, with the service trade deficit narrowing 46.1 percent from the same period last year to 401.7 billion yuan in H1.

During the first six months, China's trade of knowledge-intensive services increased 9.2 percent year-on-year to 974.43 billion yuan, accounting for 43.7 percent of total trade in services.

Among them, exports of knowledge-intensive services rose by 9.7 percent to 512.87 billion yuan, accounting for 56.2 percent of the total. Intellectual property payments, insurance services, telecom computer and information services maintained faster growth, with year-on-year growth of 37.2, 18.7 and 15.2 percent respectively.

Talking about the future of service trade, Li said over a long period, China had higher service trade deficits in tourism, education and healthcare. In the future, the country should put more efforts to narrow the service trade deficit in these sectors and enhance industrial competitiveness.

China also has strong international competitiveness in construction, engineering contracting and computer software. In the future, the country will further make use of those strengths and improve the quantity and quality of service trade, Li added.