A sign identifying an in-store tax refund merchant is displayed at a shop in Zhejiang province. [Photo/Tide News]

China's Ministry of Commerce has issued a plan to develop national demonstration zones for service trade innovation, with Hangzhou among 16 cities and Hainan province chosen for the first batch.

Under the plan, the pilot areas will focus on five tasks: promoting integrated innovation across industrial and supply chains, strengthening the competitiveness of market entities, improving the supply of production factors, advancing high-level opening-up, and building support systems at home and abroad.

Hangzhou's service trade imports and exports reached 464.64 billion yuan ($68.02 billion) in 2025, up 5.64 percent year-on-year, placing the city among national leaders. Exports of knowledge-intensive services accounted for 54.7 percent of the city's service trade exports, 4.2 percentage points above the national level.

The city's service trade sectors have become increasingly concentrated. Telecommunications, computer, and information services, along with travel services, transport services, and personal, cultural, and recreational services, maintained leading positions, while finance and intellectual property services grew quickly.

Hangzhou will use the demonstration zone program to expand the spillover effect of the Global Digital Trade Expo, helping companies secure orders and enter new markets closer to home. The city will also support companies in attending major industry exhibitions at home and abroad, including Gamescom in Cologne and CES in Las Vegas.

Hangzhou will further improve convenience for inbound tourists and expand its in-store departure tax refund service, using exhibition traffic to drive business visits and tourism spending by overseas visitors.