Opinions of the State Council concerning Accelerating the Development of the Service Sector
Source: The State Council View: 524 Date: 2011-05-16

To the People’s Governments of all provinces, autonomous regions, and municipalities directly under the State Council, and all ministries, commissions and directly subordinate authorities under the State Council:

In line of the general direction and guidelines for the development of the service sector as determined in the design of the Eleventh Five-Year Plan, the following opinions concerning accelerating the development of the service sector are advanced:

I. Fully recognizing the great significance of accelerating the development of the service sector

The service sector is an integral part of the national economy, and an important indicator for measuring the economic development level of a modern society. China is now in the stage of accelerated development in the full construction of a better-off society and development of industrialization, urbanization, market mechanisms and internationalization, and many conditions supporting the sound and rapid economic development have been preliminarily in place. To speed up the development of the service sector, escalate the ratio of the service sector in the three tiers of industrial structure, and make the service sector a leading industry in the national economy are the inevitable path to boosting the adjustment of economic structure and accelerated transition of the mode of economic growth, are the imperative needs for effectively easing the bottleneck restrictions as a result of shortage of resources and improving the use efficiency of resources, and are the effective ways for adaptation to the new situations of opening up to the outside world and realization of upswing in the integrated strength of this country as a whole. To accelerate the development of the service sector, form a relatively complete system of the service sector, offer profuse products satisfying the needs of people in materials, culture and living, and make it a major sector absorbing both urban and rural new workers are the intrinsic requirements for the settlement of the livelihood of the people, promotion of the social harmony and full construction of a better-off society. Therefore, accelerating the development of the service sector must be paid close attention to and be well done as a major long-term strategic task at the height of carrying the scientific development view and strategic ideology of building a harmonious socialist society into real effect.

Both the Central Party and the State Council have always accentuated the development of the service sector, and made a series of encouraging and supporting policy measures, which have produced inspiring results. Especially since the 16th Conference of the Chinese Communist Party, the service sector has continued to expand in scale, improve in both structure and quality and deepen in the reform and opening up of service fields, and has played a significant role in facilitating the sustainable and rapid economic development, increasing work opportunities, etc. However, there are problems that cannot be neglected in the development of the service sector, such as the overemphasis on the development of industry, especially heavy industry, in some places, and insufficient attention to the development of the service sector. In general, China’s service sector is short in supply, unreasonable in structure, low in service level, weak in competitiveness, low in the proportion of contribution to the national economic development, not in match with the accelerated economic and social development and adjustment and upgrade of the industrial structure, with the requirements for the full-scale construction of a better-off society and building of a harmonious socialist society, and with the new situations of economic globalization and full opening up to the outside world. All localities and all departments should further enhance their awareness, be focused in mind on tangible decision making and deployment, change their notions on development, broaden their vision about development, and endeavor to settle the existing problems, so as to speed up the escalation of the service sector to a new level, help the economy and society run on the tracks of scientific development, and boost the sound and rapid development of the national economy.

II. General requirements and major targets for accelerating the development of the service sector

For the present and during a period of time henceforth, the general requirements for the development of the service sector are: under the guidance of the Deng Xiaoping’s theory and the important “Three Represents” ideology, to fully implement and materialize the view of scientific development and the important strategic ideology of building a harmonious socialist society, to treat the development of the service sector as a major way for the accelerated adjustment of industrial structure, transition of the mode of economic growth, improvement of the overall strength of the national economy and realization of the full, consistent and sustainable development of the national economy, to insist on the ideas of people first, reciprocity and fairness, further enhance the public service system and mechanisms that should cover both urban and rural areas and function reasonably, and continue to improve the ability and level of supply of public services; in the direction of market mechanism, industrialization and socialization, to promote the service sector to broaden its fields, strengthen its functions and optimize its structure; to adhere to the overall allocation and coordination as well as categorized guidance, make full use of relative advantages, perform reasonable planning, and shape up a development pattern for a service sector that is vigorous, with distinct features and mutually supplemental in advantages; to insist on the innovative development, enlarge the opening up to the outside world, absorb the advanced experiences, technologies and modes of management of the developed countries, improve the international competitiveness of the service sector, and realize the sound and rapid development of the service sector.

In accordance with the design of the Eleventh Five-Year Plan, the major targets in developing the service sector during the period of the Eleventh Five-Year Plan are: by the year of 2010, the ratio of the added value of the service sector to the GDP should have grown by 3 per cent as opposed to the year of 2005, the ratio of workers engaging in the service sector to those in the whole society should have grown by 4 per cent, and the total amount of trade in services should have reached 400 billion U.S. dollars; an industrial structure giving priority to the service economy should have been formed in qualified large- and medium-sized cities, and their growth rate of added value of the service sector should have exceeded the growth rates of the GDP and the secondary industry. By the year of 2020, the transition to an economic structure giving priority to the service economy should have been accomplished preliminarily, the ratio of the added value of the service sector to the GDP should have exceeded 50%, the structure of the service sector should have been notably optimized, the employment capacity should have been notably augmented, the degree of equalization in the public services should have been notably improved, the market competitiveness should have been notably strengthened, and the overall level of development should have basically satisfied the requirements for the full construction of a better-off society.

III. Greatly optimizing the structure of development of the service sector

To adapt to the new situations of new type of industrialization and the upgraded consumption structure of residents, the emphasis should be placed on the development of the modern service sector, the traditional service sector should be regulated and upgraded, and the role of the service sector in attracting employment should be fully displayed. The structure of this sector should be optimized, the technical structure should be upgraded, the organizational structure should be reformed, and the level of development of the service sector should be fully improved.

The service areas facing production should be strongly developed so as to facilitate the organic integration and interactive development of the modern manufacturing industry and the service sector. The division of work by specialty should be detailed and deepened, the productive and manufacturing enterprises should be encouraged to reform their current business processes, outsourcing should be boosted, core competitiveness should be fortified, the extension from the production and processing lines to self-development, brand name marketing and other service lines should be accelerated, the consumption of resources should be reduced, and the added value of products should be raised. Priority should be given to the transportation industry, the levels of specialty and socialized services of logistics should be escalated, and the third-party logistics should be strongly developed; the information service area should be actively developed, the development of the software business should be accelerated, and the industrialization by way of informationization should be insisted on, to enhance information infrastructures, actively promote the integration of “Three Networks”, develop value-added and Internet businesses, and boost e-commerce and e-administration; the financial service area should be developed in an orderly way, the financial market system should be enhanced, and the innovation of products, services and management should be accelerated; the science and technology service area should be strongly developed, the role of science and technology in underpinning and leading the development of the service sector should be fully displayed, and the development of such specialized service areas as research and development in science and technology, spread of technologies, industrial designing and energy saving should be encouraged; such commercial services as legal consulting, accounting and auditing, engineering consulting, certification and authentication, credit appraisal, advertising, and conference and exhibition should be regulated and developed; the trade and circulation industry should be boosted and reformed, and modern business forms and new types of trade such as chain and franchised operations should be popularized. By the development of the service sector, the best use of both materials and human resources are made, the goods are circulated smoothly, the social transaction costs are reduced, the efficiency in allocation of resources is raised, and the steps toward a path to a new type of industrialization is accelerated.

The service areas facing the livelihood of the people should be strongly developed, and new types of service areas should be actively expanded and constantly fostered to produce new growth points in the service sector. Surrounding the requirements of urbanization and aging population, such service areas as municipal public utility, real estate and property services, community services, household services and socialized retirement services should be strongly developed. Surrounding the requirements of building a harmonious society, such service areas as educational, medical and health, press, postal, telecommunications, radio, film and television services and causes should be strongly developed. Importance should be attached to the rural and underdeveloped regions, the building of public service systems should be strengthened, the structure of urban and rural regional service sectors should be optimized, and the equalization of public services should be realized gradually. Surrounding the targets for construction of a better-off society and the requirements for transiting and upgrading the consumption structure, such service areas as tourist, cultural, sports, recreational and entertainment services should be strongly developed, and the consumption structure of services should be optimized, so as to enrich the spiritual and cultural life of the people. The service sector will be the major channel for increasing employment in China, the service areas with large employment capacity should be especially developed, other service areas should be encouraged to contain more employment, and the huge potential of the service sector in creating employment opportunities should be fully dug up.

Participants in the service market should be strongly fostered, and the organizational structure of the service sector should be optimized. The enterprises in the service business should be encouraged to strengthen their own creativity, improve their general quality and competitiveness through technological progress, and continue carrying out managerial, service and product creation and innovation. We should, based on enterprises with great competitiveness, and by means of acquisition and merger, consortium, restructuring and IPO, etc., promote large-scale networked operations with well-known brands so as to form a batch of large-scale service enterprises or enterprise groups that hold their own intellectual properties and well-known brand and have great competitiveness. The non-public economy should be encouraged and guided to develop the service sector, and active support should be given to the development of medium- and small-sized service enterprises so as to make full use of their advantages in helping people start their own businesses and in the creation of employment opportunities.

IV. Adjusting the development pattern of the service sector in a scientific way

We should, under the precondition of realizing the provision of universal services and satisfying the basic needs, and based on the comparative advantages and reality of regional economic development, make scientific and reasonable planning so as to shape up a development pattern of the service sector that is full of strength, adapted to the market, with distinctive features and is mutually supplemental in advantages.

Cities should make full use of their advantages in the relatively centralized talents, logistics, information and capital, quicken up the structural adjustment, and improve the quality and level of the service sector. Municipalities directly under the Central Government, cities under separate planning, capital cities and other qualified large- and medium-sized cities need to speed up the formation of an industrial structure giving priority to the service economy. In the developed regions, especially the Pearl River delta, Yangtze River delta and Bohai Sea ring, based on their advantages of faster progression of industrialization and higher resident’s incomes and consumption levels, the modern service sector should be strongly developed, the upgrade of the service sector should be promoted, the quality of the service sector should be improved, and the economic growth should be boosted mainly by the growth of the service sector. In the middle and western China, the notion that the service sector can be developed only after the industrial development should be changed, the service areas with comparative advantages and traditional service areas should be actively developed, aand the service areas diverted from the eastern China may be picked up, so as to escalate the development of the service sector to a new level as soon as possible and continue raising the rate of contribution of the service sector to the economy growth.

In accordance with the state planning, development trend of urbanization, and industrial distribution, all localities should offer guidance to such service areas as traffic, information, research and development, design and commercial services, etc. that have a stronger radiating or aggregative effect, and foster and form state or regional service centers that are prominent in the principal functions based on a cluster of cities or the central city. The traffic infrastructures such as railways, highways, civil aviation and water carriage should be further improved, with the priority being given to the development of city public transportation, so as to form a fast, convenient, smooth, highly efficient and safe integrated transportation system, and no time should be wasted in building international shipping centers and major ports in Shanghai, Tianjin and Dalian. The construction of transportation pivots and connecting transportation facilities should be stepped up, and regional logistical centers should be formed by strengthening the allocation and integration of logistical infrastructures in the economically developed regions and transportation pivot cities. State or regional financial centers should be established by ing the extra-large cities and large cities that have stronger radiating functions and extensive service spectrums. Based on the regions that have a large scale of industrial convergence, a high level of equipment, and a strong ability in scientific research, the fostering and completion of public service platforms that are mutually supplemental in functions and have a strong sustainability in such areas as research and development, design, financial management and information inquiry should be accelerated, and a batch of industrial design and research and development service centers should be built by making full use of the functions of the state software industry bases, so as to form ever new growth poles with strong driving powers and extensive radiating spectrums.

We should, by adhering to making good use of existing service resources, break up the administrative separation and regional blockage, fully display the functions of the market mechanisms, encourage the cooperation in various manners between sections, areas and regions, promote the restructuring of resources in the service sector, make full use of the combination advantages, deepen the division of work and cooperation so as to realize the optimal allocation of resources in a greater extent, in a broader field and at a higher level. We should avoid impractical comparison, the blind investment, and repetitive construction.

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