http://www.economist.com/news/finance-and-economics/21572236-services-are-poised-become-countrys-biggest-sector-served-china
This article discusses China's economy . They are known for their industry, which accounted for 45.3% of its GDP in 2012. In fact, the article said, "...Manufacturing’s share of China’s GDP was more than 18 percentage points above the global norm in 2005. Services, in contrast, were almost eight points below." It also mentioned, comparing the U.S. to China, only 20% of our GDP is that of manufacturing. We are a much more service based economy.
The article suggests that 2013 may be the year for China to start shifting a bit more towards services, its share in GDP being less than one percentage point smaller than manufacturing's share in 2012. It says services are growing faster.
The article concludes in saying, "The strength of services may reflect the ongoing rebalancing of Chinese demand away from exports and towards consumption." This could be very good for the chinese economy in that because services are more "labour-intensive," job creation, wages, and household spending could increase.
What I am interested to see is how this change in the Chinese economy could affect the world economy.
China was abe to build its economy primarily because of manufacturing and export of goods. Western economies have been developing into more service based economies with United States leading that trend. Today, lawmakers disagree on whether we should bring manufacturing back to the U.S. or keep it abroad where it will be much cheaper to produce the same goods.
ReplyDeleteI agree that expansion of services creates more jobs but at the same time decrease in manufacturing reduces employment. Unless China is able to maintain their manufacturing at the same level and grow their service-based industries it will be hard to say that they will be better off economically. China's growth of services available for the world will certainly be able to create competition and affect the other nations like United States.
In my opinion, slowly but surely China is changing to a developed economy. Services is a normal expression of a developed economy.
ReplyDeleteIndustrial production should not reduce, but the number of people employed in it should. The service part will inevitably increase.
I think China will be surprisingly developed in the future.
It will be hugely important for China to maintain the manufacturing industry as they begin to build their service sector. With the large size of their population, it will be important to keep employment high. This especially true as the number of college educated adults in the labor force continue to increase. They are unwilling to take manufacturing jobs (which are plentiful), and are left in a void because their is not a high number of service jobs. I'm not sure how this will affect China's development. The service sector will likely be expanded in cities like Beijing, Guangzhou, and Shanghai which are Tier 1 cities in China. Tier 2 cities like Xi'an and Taijiu will likely not experience the same rise in the service sectors. I'm not sure then that it will cause further development in China evenly across the country.
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