Half of Chinese GDP is now made up of services

09/10/2018

 

The results of Chinese economic reform forty years after its beginning

 

Forty years after the beginning of the economic reform undertaken by China to increase the production capacity of the service industry, the results are certainly surprising. The reform also known as reform and opening, during these years has been, in fact, so efficient as to bring the services industry to represent 51.6 percent of the Chinese economy.

The emerging industry, the new business models, and the expansion of product portfolios are among the most evident results of the reform. In fact, China’s service businesses have reported rapid growth in the 40 years.

 

The service sector now accounts for 51.6 percent of the economy

 

According to recent data from the National Bureau of Statistics, the results are excellent. Added value in the Chinese service industry increased to CNY42.7 trillion (USD6.2 trillion) in 2017 from CNY90.5 billion (USD13.1 billion) in 1978; that is an average annual growth rate of 10.5 percent which is one percentage point higher than that of the GDP.

Also for the employees in the sector, the data are positive. The total number of workers, in fact, in the service sector grew to 348.7 million last year from 48.9 million in 1978.

 

China has now entered the middle and late stages of industrialization

 

Peng Peng, deputy chairman of the Guangdong Reform Studies Association, in an interview to Yicai Global said that the manufacturing sector’s demand for manpower will decrease thanks to the rise of automation while the service industry features a higher capacity for employment.

Obviously, due to its size, the results in China are never homogeneous throughout the territory. According to Gou Yiyong, a researcher at the Social Academy of Guizhou Sciences, interviewed by Yicai Global, the coastal regions have moved from the intermediate stages of industrialization to the advanced phase, while the western regions remain in the initial phase when the industrial bases are rather weak and require more industrialization and urbanization.

 

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