Navigating Sino–European trade headwinds
Services exports to China a less explored area to unleash strength
Beyond the factory floor
In many types of services, experts see ample scope for the EU to export more producer services to China. While both are manufacturing powerhouses, European manufacturing is more service-oriented.
The more sophisticated manufacturing becomes, the more it relies on services. Wang pointed to the automotive industry as an example. When a German carmaker invests in China, it sells more than vehicles alone.
Engineering services design how each stage of assembly fits together. Industrial software coordinates the machinery and workers. Supply-chain and logistics optimization ensure that thousands of components arrive where and when they are needed.
After a car goes on sale, services continue throughout its lifecycle, including maintenance, infotainment system updates, and more.
"Knowledge-intensive producer services tend to have higher labor productivity than traditional services. They can therefore contribute not only to economic growth, but also to improving the overall quality of that growth," Wang said.
Zhou added that a big share of the revenue in European manufacturing often comes from value-added services, as well as the proprietary know-how embedded in them. Even when service providers do not make the products themselves, they retain a sizable economic return through IP licensing.
