Chinese policy makers are taking moves to boost the under-developed service industry to even out the playing field.

While macro-control measures have been placed on sectors perceived to be in danger of overheating amidst the fast growing Chinese economy, policy makers are also taking moves to boost the under-developed service industry to even out the playing field.

If studying which sectors have contributed most to China's GDP over the past decade, you'll find heavy and light industries as well as construction on top.

But tertiary industries have maintained a similar level of growth since the early 1990s, a very low figure compared to similar economies.

Zhu Mingchun from the Industry Policy Department of China's National Development and Reform Commission talks about the reasons behind this:

"The function of tertiary industries hasn't been fully recognized. An advanced modern service sector can help enterprises greatly reduce costs on, for example, buying and selling. But Chinese businesses reduce costs through enlarging production capacity and lowering wages. It's the wrong direction."

Zhu Mingchun says the advantages of boosting tertiary industries are obvious.

Compared to heavy or light industry, the service sector eats up fewer natural resources, causes less pollution, has an unlimited market, while at the same time creates more jobs.

However, some local governments and enterprises believe industrialization means only a developed manufacturing industry and large outputs.

Zhu Mingchun notes that the central government has already noticed the unbalanced growth between China's second and third industries, and has made a strategic plan to even out the playing field.

So far priority has been given to improving logistics and transportation as well as streamlining the financial sector and information distribution.

Other target areas include commercial services such as accounting, medical care and education.

Zhu Mingchun from the National Development and Reform Commission explains why the government is now emphasizing the importance of the service industry:

"Why are we now stressing the tertiary industry? Because the opening up of our service industry is greatly falling behind our manufacturing industry. Monopolies are still seen in some areas, which have blocked large-scale improvements."

Zhu Mingchun believes sound policies are important to encouraging private and foreign capital investment in China's under-developed service sector.

(Xinhua News Agency November 24, 2004)