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The Chinese Academy of Social Sciences (CASS) recently published the No. 5 Development Report of China's Service Industry -- the Reform and Innovation of the Service Industry System, which highlights that China's service industry lags behind other countries with similar per capita income figures.

 

In 2002, the service industry accounted for 41.7 percent of gross domestic product (GDP), but that dropped to just 40.2 percent in 2005. Also in 2005, service industry employees accounted for only 31.4 percent of the country's workforce, far lower than the global average.

 

In addition, a rising per capita GDP has only managed to boost the development of the service industry in spurts. The non-linear increase in incomes has resulted in an income gap that is growing wider every day, with many people struggling to make ends meet. Consequently, the development of the service industry is correspondingly lopsided, with sectors catering to the ultra rich flourishing, and those catering to the lower-income groups languishing.

 

With the service industry still far behind the secondary industry in terms of contributing to the development of its economy, China is a long way from shifting its economic model from an industrial to a services-oriented one.

 

(China.org.cn by Li Xiaohua, January 24, 2007)