The Ministry of Commerce published its first report on the country's service trade yesterday, analyzing the development and prospects of China's service trade sector.

The service exports stood at US$40.04 billion in the first half of this year, up 17 per cent year-on-year, while service imports hit US$45.73 billion, a year-on-year rise of 19 per cent, the report said.

Hong Kong, the United States and Japan are the Chinese mainland's top three service trade partners.

Despite the fast growth in China's service sector in recent years, service exports continue to account for less than 10 per cent of China's total exports, only half of the global average.

"Although China's surplus is huge in commodity trade, its deficit in the service sector has increased 44 per cent year-on-year to US$5.7 billion in the first six months of this year," said Hu Jingyan, director of the ministry's department for trade in services.

The report said that China's service trade is largely focused on a number of traditional sectors tourism accounted for 36 per cent of total service exports in the first six months of this year, while transportation took up 23 per cent.

China's service exports are still at an "early stage" in technology-intensive sectors, such as finance, insurance and consultation.

Hu said the service trade enjoys huge development potential. For example, it attracted less than 20 per cent of the nation's total foreign direct investment last year, while many overseas sectors remained untouched by Chinese enterprises.

The Chinese Government, which has encouraged commodity trade in recent decades, is now taking steps to develop the nation's service trade, according to Hu.

According to the 11th Five-Year Plan, the nation's service trade is expected to reach a volume of US$400 billion in 2010.

Therefore, the commerce ministry will spare no efforts next year in developing some key service sectors, including cultural products, information technology, transportation, finance and insurance, said Hu. It is also expected to build some well-known brands in the service sector.

"We also plan to cash in on some existing platforms of commodity exports, such as the Canton Fair and the China International Fair for Investment and Trade," he said.