Explainer | China’s services sector: what is it and why is it important to the economy?
- China’s services sector accounted for 54 per cent of gross domestic product (GDP) in 2019
- It includes various service industries such as transport services, information services, investment services and health care, as well as arts, entertainment and recreation
What is China’s services sector?
China’s services sector is made up of various industries, including warehousing and transport services; information services; securities and other investment services; professional services; waste management; health care and social assistance; and arts, entertainment and recreation.
China’s services sector accounted for 54 per cent of gross domestic product (GDP) in 2019, followed by the industrial sector at 39 per cent and the agricultural sector at 7 per cent, according to the World Bank.
How is the performance in China’s services sector measured?
China’s two purchasing managers’ indices (PMIs) are indicators of the economic health of the service economy, gauging business sentiment in the sector.
The official PMI released by the National Bureau of Statistics largely measures sentiment among larger service firms, many of which are state-owned.
The PMI produced by Markit for Caixin magazine largely measures sentiment among smaller, mostly private firms.
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What is the purchasing managers' index (PMI)?
The indices are compiled from surveys of business owners and supply-chain managers, gauging changes in production, new orders, employment and delivery times, among other metrics.