Factors Affecting the Ratio of Service Industry in GDP: A Comparative Analysis of China, Japan, and South Korea*

Hu Cui1  and Xu Zhaoyuan2
1 School of International Trade and Economics, Central University of Finance and Economics, Beijing, China
2 Enterprise Research Institute, Development Research Center of the State Council, Beijing

 
Abstract: Based on the input-output model and using a demand side approach, this paper surveys how factors such as consumption, investment, net export, intermediate input and price affect the ratio of China’s service industry as compared with Japan and South Korea. An analysis of China’s data indicates that price and residential consumption structure are key contributing factors to the rising ratio of the service industry. Conversely, intermediate input and government consumption are factors that lead to a decrease in the ratio of the service industry. An analysis of Japan and South Korea shows that price and residential consumption structures were linked to the rises in their service industry. This paper concludes that the ratio of China’s service industry to gross domestic product (GDP) will continue to rise over the 12th Five-Year Plan period (2011-2015) and beyond.
Key words: input and output, service industry ratio, factor

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