Frost & Sullivan Executives: Differential Development Between China and US Trade in Automotive Sector: High-end technologies are restricted, while AI applications and supply chain services remain active
Frost & Sullivan Executives: Differential Development Between China and US Trade in Automotive Sector: High-end technologies are restricted, while AI applications and supply chain services remain active
"High-end technologies are limited, digital services show moderate growth, and consumer and supply chain services are active." Currently, Sino-US service trade is exhibiting such a "gradient temperature difference." Service trade has become an important engine for global trade growth: In 2025, China's total service imports and exports reached $1.18 trillion, a 7.4% increase year-on-year, with service imports ranking second globally; in the same year, the US service trade surplus rose to a record $3,395 billion, including a surplus of approximately $34.4 billion with China, nearly $100 million per day. However, at the same time, high-end sectors such as semiconductor design tools, advanced manufacturing equipment, and AI base models are affected by export controls, data security, and compliance requirements, increasing uncertainty; service demands such as cross-border e-commerce, healthcare digitalization, and manufacturing supply chain support remain stable. AI and digital technologies are becoming new variables reshaping the bilateral service trade division of labor.
Under this background, a reporter from China Economic Net interviewedthe temperature of Sino-US service trade cooperation, the bottlenecks in unlocking potential, and how AI is changing the division of labor in the digital service value chain between the two countries,Dr. Wang Xin, Global Senior Vice President of Frost & Sullivan, Co-Chair of Asia-Pacific Region, and Chairman of China, was interviewed by Frost & Sullivan (hereinafter referred to as "Frost & Sullivan").
China Economic Net
*Click at the end of the articleto read the original text, to view the complete report
Q:The 20th Frost & Sullivan Summit proposed "emphasizing China and the future." What is the basis for Frost & Sullivan's judgment?
Dr. Wang Xin
Global Senior Vice President of Frost & Sullivan, Co-Chair of Asia-Pacific Region, Chairman of China
The core basis for Frost & Sullivan to propose "emphasizing China and the future" lies in the irreplaceability of the Chinese market and the systematic upgrading of the industrial ecosystem. First, China has the world's deepest domestic market, with the middle-income group being the largest globally and consumption rates still showing significant potential for improvement. The coordinated urban-rural consumption and multi-polarization regional pattern provide a full-cycle validation scenario for various services from popularization to upgrading. Second, China's digital infrastructure and consumption scenarios are leading globally. The penetration of mobile internet, the maturity of e-commerce ecosystems, and the penetration rate of AI applications constitute a natural testing ground for service digitalization. Third, China has unparalleled engineering and industrialization capabilities, including a manufacturing system covering all industrial categories, a flexible supply chain response speed, and a conversion efficiency from research and development to mass production, enabling innovative services to quickly complete a commercial closed loop. Fourth, in cutting-edge fields such as AI and biomedicine, China is shifting from application implementation to source innovation, with the innovation iteration cycle continuously shortening, providing predictable technical benefits and industrial growth for long-term capital.
Q:What is your view on the overall temperature of current Sino-US service trade cooperation?
Dr. Wang Xin
Global Senior Vice President of Frost & Sullivan, Co-Chair of Asia-Pacific Region, Chairman of China
Current Sino-US service trade cooperation shows a clear gradient temperature difference, in a structural state of "limited high-end technologies, moderate digital services, and active industrial and consumer services." In high-end technology areas, semiconductor design tools, advanced manufacturing equipment, and AI base models are affected by export controls and geopolitics, resulting in relatively low cooperation temperature and significant increased uncertainty. In digital and industrial service areas, cross-border e-commerce, AI applications, and healthcare digitalization maintain moderate growth, with both sides maintaining business interactions based on their respective market depth and engineering capabilities. In consumer and supply chain services, market demand for consumer goods distribution, manufacturing supply chain support, and logistics infrastructure remains stable. Overall, Sino-US service trade has not fallen into a comprehensive contraction, but the focus of cooperation is shifting from traditional one-way technological flow to bidirectional capability coupling in digitalization and scenario-based approaches, with complementarity still existing, while competition remains prominent in high-end technology areas.
Q:Some believe that the potential of Sino-US service trade cooperation is not fully unlocked. From your perspective, what are the main bottlenecks restricting the unlocking of potential?
Dr. Wang Xin
Global Senior Vice President of Frost & Sullivan, Co-Chair of Asia-Pacific Region, Chairman of China
The bottlenecks restricting the unlocking of Sino-US service trade potential mainly lie in three aspects: system, structure, and rules. At the system level, the regulatory framework for data cross-border flow is still being improved, and policy predictability needs to be enhanced. Compliance costs significantly hinder the deep expansion of digital services, AI applications, and cross-border data-intensive industries. At the structure level, there is a clear gap in capabilities between the two sides. China's supply capacity for high-end technology services still needs improvement, especially in the fields of EDA/IP, basic software ecosystem, advanced manufacturing equipment, and key materials in the semiconductor industry; at the same time, export controls and data security compliance requirements in cutting-edge technology areas also increase the cost of establishing technical mutual trust. At the rule level, global digital trade and emerging technology governance rules have long been dominated by the US and Europe. China's international voice in digital trade, AI governance, and industry standards still needs improvement, and the process of institutional opening and rule alignment is relatively lagging. Additionally, service trade itself has characteristics such as intangibility, heterogeneity, and high compliance dependence. Compared with goods trade, it is more difficult to achieve breakthroughs through single tariff reductions, requiring systematic institutional arrangements and long-term trust accumulation.
Q:How will AI change the cooperation model and content of Sino-US service trade?
Dr. Wang Xin
Global Senior Vice President of Frost & Sullivan, Co-Chair of Asia-Pacific Region, Chairman of China
AI is reshaping the global service trade landscape in three dimensions: delivery format, cooperation targets, and division of labor logic. The two countries are showing different development paths in this process. In terms of delivery format, service delivery is shifting from human-dependent content generation and information response to task execution and process automation based on intelligent agents. Model capabilities are integrated into enterprise business systems through API calls and intelligent agent workflows, reducing reliance on traditional human scale and geographical location. In terms of cooperation targets, the content of cooperation has expanded from traditional information technology services to industry智能化 solutions, enterprise knowledge system construction, and intelligent agent engineering services, with significantly increased technical density and data dependence. In terms of division of labor logic, the US continues to lead in basic large models and cutting-edge models, while China has a comparative advantage in the application layer and industry implementation aspects due to its vast number of application scenarios, engineering implementation capabilities, and data feedback. There is potential for complementary capabilities in the technical chain between the two sides. At the same time, the policy environment for AI security governance, data compliance, and cross-border technology cooperation is becoming increasingly complex, bringing new uncertainties to the depth and breadth of bilateral cooperation. Both sides need to explore sustainable cooperation paths while respecting their respective regulatory frameworks.
Q:In the field of service outsourcing, Sino-US cooperation is shifting towards "technology-driven." How will digital transformation reshape the value chain division of labor in digital services between the two countries?
Dr. Wang Xin
Global Senior Vice President of Frost & Sullivan, Co-Chair of Asia-Pacific Region, Chairman of China
Digital transformation is driving the shift of Sino-US value chain division of labor in digital services from a linear chain to network collaboration. The US has deep expertise in chip design, EDA/IP, basic software ecosystem, and cutting-edge model layers, and its technical architecture and ecosystem rules still have significant influence in the short term. China, with its ultra-large market, frequent scenario iteration, and flexible supply chain capabilities, has developed distinctive scenario operation and data-driven capabilities in cross-border e-commerce operations, live e-commerce, smart terminal interaction, and C2M reverse customization. In areas such as cross-border e-commerce, digital consumption, and supply chain services, the two sides have historically formed a certain division of labor with complementarity. However, in recent years, affected by changes in the global trade policy environment, this division of labor faces new uncertainties. In the future, the competitive focus in the digital service sector will shift from pure cost-efficiency comparisons to the ability to define the ecosystem. The control over data entry points, cross-platform collaboration rules, and scenario-based service standards will greatly affect each side's position in the digital service value chain.
This interview was first published on China Economic Net, written by Wang Kai. The original title was: 'Frost & Sullivan Awards Frost & Sullivan China LeadLeo Research Institute LeadLeo YUAN CAPITAL SULLIVAN TELE-TREND CLOUD TECHNOLOGY TradeGo MagnaTEC Automotive & Mobility Environmental Protection & Energy Saving Technology Logistics & Supply Chain MATERNAL AND INFANT Education & Training Real Estate & Property Catering & New Retailing Advanced Materials Healthcare & Life Sciences Semiconductor & Chip COMMERCIAL AVIATION Technology, Media and Telecom LANDSCAPING Big Data & AI Infrastructure Construction & Utilities Culture & Entertainment AGRICULTURE, FORESTRY ANIMAL HUSBANDRY AND FISHERY Food & Beverage Fintech SHIPPING AND PORTS Dual Carbon & New Energy Mining & Metals Public Sector Cross-Border E-commerce Trade Building Technology, Construction & Decoration Beauty & Fashion Smart Homes Digital Infrastructure Enterprise Services Consumer ElectronicsWhy America and China need each other more in services trade
Business Consultation Hotline
(021) 54075836
Scan to add official WeCom customer service for online support.
Scan to follow our official WeChat
