The Growth of China’s Services Sector and Associated Trade

This research paper examines the expansion of China's service sector and its role within a sustainable trade strategy. It analyzes the structural shift of the Chinese economy toward services, the current state of trade in services, and the challenges regarding international competitiveness and liberalization. The authors argue that service sector growth is linked to urbanization and suggest that relaxing migration restrictions and increasing competition are key to enhancing productivity and sustainability.

• China's tertiary industry has experienced rapid growth, with its share of GDP increasing from over 20 per cent in 1978 to approximately 40 per cent by 2007, and an annual average growth rate of value added reaching 10.8 per cent during that period.
• China is a net importer of services with an expanding deficit, which exceeded US$8.8 billion in 2006. This deficit is primarily driven by transportation, insurance services, and royalties and license fees.
• Foreign direct investment (FDI) in China's service sector is heavily concentrated in business services, which accounted for over 70 per cent of foreign capital utilized in the tertiary industry in 2006.
• China's international competitiveness in services is considered weak, with revealed comparative advantages (RCA) limited primarily to resource- and labour-intensive sectors such as tourist and construction services.
• The 11th Five-Year Guidelines set ambitious targets for 2010, including increasing the service industry's share of GDP by 3 per cent compared to 2005 and reaching a total trade in services volume of US$400 billion.
• Research suggests that many Chinese cities are undersized due to internal migration policies, and that allowing more migration could increase productivity and per capita income by fostering specialized producer services.
• The authors propose a 'win-win-win' policy approach: relaxing migration controls for skilled personnel to cities to drive employment and productivity, while simultaneously investing in infrastructure and environmental amenities to maintain living standards.

APA

Liping, Z., & Evenett, S. J. (2010). The Growth of China’s Services Sector and Associated Trade. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/sts_4_growth_china_services_sector.pdf

Chicago

Liping, Zhang, and Simon J. Evenett. The Growth of China’s Services Sector and Associated Trade. International Institute for Sustainable Development, 2010. https://www.iisd.org/system/files/publications/sts_4_growth_china_services_sector.pdf.

Wikipedia

{{cite report |last1=Liping |first1=Zhang |last2=Evenett |first2=Simon J. |title=The Growth of China’s Services Sector and Associated Trade |publisher=International Institute for Sustainable Development |date=July 2010 |url=https://www.iisd.org/system/files/publications/sts_4_growth_china_services_sector.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{liping2010growth, author = {Liping, Zhang and Evenett, Simon J.}, title = {{The Growth of China’s Services Sector and Associated Trade}}, institution = {International Institute for Sustainable Development}, year = {2010}, month = jul, url = {https://www.iisd.org/system/files/publications/sts_4_growth_china_services_sector.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }