China’s Service Sector towards 2035: Outlook, Strategic Position and Policy Advice

Xia Jiechang1* and Xu Ziyan2

1 National Academy of Economic Strategy, Chinese Academy of Social Sciences (CASS), Beijing, China

2 Business School, University of the Chinese Academy of Social Sciences (UCASS)

Abstract: China is setting out on a new journey of building a modern socialist country in all respects after achieving moderate prosperity. Modern services are an important part of China’s economy, underpinning China’s development towards a great modern socialist country. Globalization, industrial development, urbanization, innovation and income growth will drive China’s service sector development. By 2035, the service sector will account for 60.98% and 59.12% of total value-added and employment, respectively, and labor productivity in the service sector will rise from 145,500 yuan/person in 2019 to 282,300 yuan/person. The Fifth Plenum of the 19th CPC Central Committee called for “basically achieving the vision of socialist modernization by 2035.” According to the CPC Central Committee’s overall arrangements for the 2035 vision, we must identify a clear strategic position and tasks for the development of modern services as a key element of the modern industrial system, enhance service sector competitiveness, and achieve service sector modernization. To achieve this strategic goal, we must promote digitalized, intelligent, platform-based, standardized, and quality-oriented service sector development. We must give play to the decisive role of the market and the macro-regulatory role of the government in spurring service innovation, industry integration and clustering, and service sector reform and openness.

Keywords: service sector trends, service sector modernization, competitive service-based economy, implementation strategy

JEL classification code: L88, O14P21

DOI: 10.19602/j.chinaeconomist.2021.01.04