Booming service sector to underpin China's economic expansion

Updated 2017-06-16 09:28:40 Xinhua

China's service sector is expected to play a bigger role in powering the world's second largest economy as increasingly affluent Chinese consumers crave more diverse and better-quality services.

A slew of economic indicators released by the National Bureau of Statistics (NBS) Wednesday showed that the Chinese economy expanded steadily in the first five months, with the service sector being a major bright spot.

Official data showed that China's service sector continued to expand in May, with the Index of Services Production maintaining rapid growth of 8.1 percent year on year, while business activities expanded faster than April to reach 53.5 percent.

Meanwhile, investment in the service industry jumped 11.6 percent year on year in the first five months, 3 percentage points higher than overall investment growth.

Despite rapid growth, China's service sector still holds much potential for growth, with per capita GDP for Chinese exceeding 8,000 U.S. dollars.

The service sector's added value accounted for 51.6 percent of China's total GDP last year, well below the average of 57 percent among middle-income economies, let alone the 74 percent for developed countries, according to Meng Wei, spokesperson with the National Development and Reform Commission (NDRC).

"The supply of the service sector still has to catch up with upgrading demand, and China's service sector is now at the middle-and-lower parts of global industrial value chain with a rather big deficit in service trade" Meng said.

The top economic planner in China released a blueprint for the sector's development from 2017 to 2025, which highlights reform efforts to unleash the sector's vitality, including streamlining regulation, encouraging market competition and improving standardization.

China will further open up its booming service sector to expand engagement in the global industrial chain and boost competitiveness, according to the blueprint.

The service sector is a priority in China's opening-up progress, and the government will keep opening up the market while guarding against risks to national security, it added.

Efforts will be made to improve the professional quality of service sectors, including information technology, finance, human resources and energy conservation, while expanding the supply of services in education, sports, elderly care and health care.

China will integrate the development of the service and manufacturing sectors to increase the service sector share of total GDP to 60 percent by 2025. The service sector will provide 55 percent of the country's employment by that time, according to the blueprint.

Meanwhile, China aims to develop service city hubs and brands with global influence by 2025, with enhanced competitiveness in service trade.

"The service sector is closely related to people's livelihood. The stronger the service sector grows, the steadier the economy expands," said Liu Aihua, NBS spokesperson.

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