Since the economic reforms of 1978, China has seen its service sector maintain growth alongside that of the overall economy

● The Chinese service industry’s contribution to GDP growth in 2013 surpassed those of the mining and manufacturing sectors, and the gap has continuously widened.

● Despite the continued rise in importance of the service sector, servitization levels remain very low compared to those of advanced economies and other countries in the BRICs bloc. 

With manufacturing growth slowing significantly since 2012, the service industry has emerged as a major sector holding up employment in the Chinese economy. 

While the service industry is pushing the Chinese economy forward both in GDP and employment, growth in labor productivity in the sector has greatly declined since the late 2000s.

● This implies that with the recent slowing of Chinese economic growth, the service industry is absorbing surplus labor.

While China enjoys a large balance-of-payments surplus in goods trade, trade in international services has incurred large losses over a long period of time, especially in the travel, transportation, intellectual property and insurance industries.

Expansion of the Chinese service market entails the creation of new opportunities for foreign businesses, and Korean business needs to actively prepare to seize this chance. 

● Doing so requires the formulation of investment strategies by region and sector by closely examining the Foreign Investment Act and the Catalog of Industries for Encouraging Foreign Investment to better cope with regulations and take advantage of support systems