This year, the Chinese economy will reach an important milestone. The services sector, according to analysts, will overtake manufacturing to become the largest contributor to China’s gross domestic product. Services, according to Beijing, accounted for 44.6% of China’s GDP last year, close to manufacturing, at 45.3%.
This development follows another significant turning point. In 2011, services—defined to include transportation, wholesaling, retailing, hospitality, catering, finance, real estate, and scientific research—for the first time employed more workers than any other sector, outpacing manufacturing’s 29.5% and agriculture’s 34.8%.
Because services are considered the key to increasing consumption, many think that China is on the verge of still another threshold-crossing event. As the Economist wrote (http://www.economist.com/blogs/analects/2013/02/services-sector) in November, “Although Chinese consumers remain frugal, 2013 may be the year that the investment-heavy economy can at last be described as ‘consumer-led.’ ”