Services contribute 54.1% to GDP

The increasing share of the services sector in gross domestic product shows that the transition to a services- and consumption-driven growth model continues to strengthen, the National Bureau of Statistics indicated on July 15.

The country's GDP grew 6.7 percent year-on-year in the second quarter, still within the government's targeted range of between 6.5 percent and 7 percent for the year.

"The nation's economic restructuring continues to improve, and the services sector has been playing a greater part in fueling growth," NBS spokesman Sheng Laiyun says.

Sheng attributes the accelerating development of the services sector to higher demand for services, coupled with the upgrading process of industries. Consumers' higher demand for better services had already become a key element of the economic rebalancing.

"The greater role the services sector has played in economic growth is quite natural when the economy has entered a state of new normal," Sheng says. New normal means an economic pattern featuring slower but quality growth.

The services sector expanded 7.5 percent in the first half compared with the same period last year.

Primary industries, which involve extractive activity such as farming and mining, grew 3.1 percent for the same period and secondary industries, involving transformative activities like manufacturing, expanded 6.1 percent in the first half.

The added value by the tertiary, or services, sector accounted for 54.1 percent of GDP in the first half, which was 1.8 percentage points higher than the same period last year, and 14.7 percentage points higher than the manufacturing industry, data from NBS showed.

The promising data were in line with that of China's financial sector, where lending to businesses in the services sector "gathered pace" in the first half of this year, says Sheng Songcheng, head of the surveys and statistics department at the People's Bank of China, the central bank.

By the end of June, outstanding loans in the services sector had increased by 12.4 percent compared with the same period a year earlier, data from the central bank showed.

Niu Li, director of macroeconomics at the State Information Center, says that the expansion of the services sector has become a major growth engine in recent years and will continue to sustain economic growth.

"What we need to be worried about is the overcapacity problems that have yet to be solved, which have made the restructuring process not as smooth as it might have been and might affect the third quarter's economic growth," Niu says.

(China Daily Africa Weekly 07/22/2016 page28)