An explanation of the underdevelopment of China’s service sector from the perspective of demand

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Fan, Wenjing, Pan, Jiadong and Zhou, Minghai (2019) An explanation of the underdevelopment of China’s service sector from the perspective of demand. Emerging Markets Finance and Trade . pp. 1-16. ISSN 1540-496X

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Abstract

The share of the service sector in China is significantly lower than that in most countries at the same level of income. Figures reveal that an insufficiency in both consumer and producer demand may be one of the reasons. We find that the demand insufficiency mainly stems from high consumer preferences for saving and China’s export-oriented trade structure. These excessive saving tendencies limit consumer demand for service products and thus hamper the development of consumer services in China. The rapid development of the processing trade also impedes the interrelation between the domestic manufacturing and service industries, reduces the effective demand for local producer services from the manufacturing industry, and ultimately restricts the growth of the producer service industry in China.

Item Type: Article
Additional Information: This is an Accepted Manuscript of an article published by Taylor & Francis in Emerging Markets Finance and Trade on 04/04/2019, available online: http://www.tandfonline.com/10.1080/1540496X.2019.1601078.
Keywords: final demand; intermediate demand; service sector
Schools/Departments: University of Nottingham Ningbo China > Faculty of Humanities and Social Sciences > School of Economics
Identification Number: https://doi.org/10.1080/1540496X.2019.1601078
Depositing User: Zhou, Elsie
Date Deposited: 09 May 2019 09:44
Last Modified: 04 Oct 2020 04:30
URI: https://eprints.nottingham.ac.uk/id/eprint/56619

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