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Business / Policy Watch

China to boost production-oriented service industries

(Xinhua) Updated: 2014-05-15 09:04

BEIJING - China will accelerate the development of production-oriented service industries in a bid to step up industrial restructuring and prop up economic growth.

Priorities will be given to the development of research and design, commercial services, marketing and after-sales services, and will be driven by the market and innovation, according to an executive meeting of the State Council chaired by Premier Li Keqiang on Wednesday.

The move is expected to stimulate domestic demand, boost social employment and improve people's livelihoods, as well as stabilize economic growth, according to the meeting.

Wang Jun, deputy director of the China Center For International Economic Exchanges' consultancy department, said the move indicated the country has started to tap the potential of industrial restructuring to maintain economic growth, rather than direct stimulus to investment and industry.

It will help improve growth quality and efficiency in the long run, he said.

Zhang Zhiqian, researcher with the Investment Research Institute under China Jianyin Investment, also endorsed the move that seeks impetus from structural adjustment, as the dependency on expanding investment would lead to serious side effects including overcapacity and environmental issues.

China's economic growth continued to shrink in the first quarter, as downward pressure still existed. However, the country's rapidly-growing service industry has been emerging as a new engine for its slowing economy.

In the January-March period, China's tertiary sector increased 7.8 percent year on year to 6.29 trillion yuan ($1.02 trillion), making up 49 percent of the country's GDP in the first quarter. Its growth pace was also faster than the 3.5 percent of agriculture and 7.3 percent of the industry sector.

According to the meeting, design and application of new materials, products and techniques will be strengthened. Improvements will be made in information technology and energy saving services, as well as logistics services for manufacturers.

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