China Trumpets Its Service Economy

On a cold January afternoon shortly before Chinese New Year, a young worker is zigzagging on his three-wheeled motorcycle through Beijing traffic. He’s rushing to deliver packages to consumers who have bought everything from socks to candelabra on Alibaba’s Tmall shopping website. He says he can make as much as 6,000 yuan ($909) a month, if he works 12-hour-plus days, seven days a week. “The more you work, the more you can make. But it’s truly exhausting,” he says.

Beijing is crawling with motorcycle-mounted deliverymen, one sign of the rapid growth of China’s service industries. Services grew 8.3 percent last year and for the first time generated more than half of gross domestic product, or 50.5 percent. Manufacturing rose only 6 percent. “If it hadn’t been for the service sector, China’s economy would be in a much worse state today,” says Louis Kuijs, head of Asia economics at Oxford Economics in Hong Kong. He notes that all kinds of services have expanded quickly in recent years.