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China Voice: Expanding tertiary sector explains better-than-expected growth

English.news.cn   2014-04-27 18:15:34

by Xinhua writer Shi Hao

BEIJING, April 27 (Xinhua) -- China attained a 7.4-percent GDP growth in the first quarter, beating wide speculation of 7.3 or even lower. Those who had doubts about the figure failed to fully grasp the increasing significance of China's tertiary sector in driving the economy.

The portion of the tertiary sector in GDP expanded to over 49 percent in the first quarter, after it overtook the secondary sector in 2013 as the largest GDP contributor. A profound and far-reaching change is taking place in the structure of the world's second largest economy.

In the past, the performance of the secondary sector played a decisive role in boosting the economy, but no longer for now. If observers still view new situations through an old prism, mistakes will be inevitable.

It is undeniable that the value added of Chinese major industrial enterprises dipped to a five-year low in the first quarter. If GDP prediction was made based on the performance of industrial enterprises, a 7.4-percent GDP growth maybe was beyond reach.

However, if the strong momentum in the tertiary sector -- which has been proven a lasting powerhouse in many developed countries -- was taken into consideration, the 7.4-percent growth was reasonable and precisely reflected the structural change in the Chinese economy.

A toning-up tertiary sector created a great number of new jobs and explained why China with a shrinking secondary sector did well in keeping people at work.

In the first quarter, China created more than three million new jobs in cities and towns, taking up about one third of its yearly target. High employment rate is a driving force in an economy, a stabilizer in a society and of course what China strives to pursue.

Over recent years, new jobs generated in the secondary sector have been on a decline, while those added in the tertiary sector are rising.

The reason lies in the fact that adding a new job in a factory entails much more investment and resources than those needed in a restaurant or a barbershop.

Therefore, a slowed economy can generate equal or even more jobs as long as its tertiary sector is robust. That is exactly the situation in China.

Compared with the overcapacity-haunted secondary sector, the tertiary one has great potentials that China can further tap.

With rapid urbanization, a large population is settling down in cities and towns in need of daily services. A lack of education, health care, nursing and other services will create huge opportunities for different kinds of investors, including private ones.

An expanding tertiary sector also means greener development with higher quality as firms in the sector emit much less pollutants and directly enhance the welfare of ordinary people.

Changes in the Chinese economy call for a renewed perspective. A thorough and comprehensive view on the role of the tertiary sector is a key to understand the Chinese economy.

Editor: chengyang
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