Market-oriented reforms in the People’s Republic of China (PRC), along with its
opening up to the outside world, brought rapid industrialization, urbanization,
and integration in international trade. The service sector has likewise witnessed
rapid, sustained development and has made great contributions to the overall
economy in terms of its share of gross domestic product (GDP) and employment.
As the contributions of the service sector to GDP growth and to employment have
increased and have caught up with manufacturing, clearly the PRC is moving into
a new stage of development with both sectors propelling economic growth.
The level of development of the service sector in terms of output and
employment shares in the economy varies in different countries and is positively
correlated with per capita income. As a developing country with a middle-income
status, the development of the service sector in the PRC has been insufficient
and has lagged behind its overall stage of development according to international
norms. The gap in the development of the service sector between the PRC and
the developed countries and also some selected developing countries is therefore
still quite wide.
Major structural problems and systematic restrictions affect the sound
development of the service sector in the PRC. The government should prioritize
in developing the sector and adopt further reforms in the near future if it wishes
to build a creative and modern society with higher income levels by 2030.