China's services trade deficit contracted in the first eight months of this year, and the share of trade in knowledge-intensive services has continued to increase, demonstrating strong resilience, according to the latest official data.

From January to August, China's services imports and exports dropped by 16.3 percent year-on-year to 2.98 trillion yuan ($438.9 billion) due to the effects of the COVID-19 pandemic and other factors.

The decrease of services exports was 21.8 percentage points smaller than that of services imports, propelling a 50.6 percent decline in the services trade deficit from the same period last year to 515.62 billion yuan, according to figures released by the Ministry of Commerce on Oct 1.

The narrowing of services trade deficit was mainly caused by the reduction of overseas tourism and education activities as a result of the COVID-19 pandemic. These activities used to greatly contribute to China's services exports, said Lian Ping, chief economist of Zhixin Investment.

Another reason for the contraction was the fast growth of knowledge-intensive exports, a typical reflection of China's economic transition and high-tech development, Lian said.

Despite the issues caused by the pandemic and China-US trade friction, knowledge-intensive services imports and exports increased by 8.5 percent year-on-year to 1.32 trillion yuan in the first eight months. They took a 44.1 percent share of services imports and exports, up 10.1 percentage points year-on-year, ministry data shows.

The country has seen rapid growth in charges for the use of intellectual property, exports of telecommunications, computer and information services and insurance services exports, according to the ministry.

"Our global competitiveness in producer services industries has been greatly improved, and this subset of service-producing industries will play an increasingly larger role in the Chinese economy," said Zhou Jingtong, a senior economist at the Bank of China Research Institute.

"This has something to do with China's technological innovation capabilities, spending on research and development, and the rapid growth of high-tech and information industries."

Producer services are intermediate inputs to further production activities that are sold to other firms, although households are also important consumers in some cases. They include computer and data processing services, management and business consulting services and engineering and architectural services.