China’s Booming Service Industry Can’t Keep Up With College Grads

After more than two decades in the factories of the Pearl River Delta making artificial Christmas trees, furniture, and golf clubs, Ji Jiansheng was ready to try something else. A dispute with his bosses over wages was the final straw, so Ji, 38, scraped together his meager savings and opened a restaurant in Shenzhen a little more than a year ago. Now he’s up at 5:30 a.m. to buy ingredients for the Shandong-style dishes his small eatery specializes in, and often doesn’t hang up his apron until 10 p.m. “I still have to work hard, but I have freedom,” Ji says. “It feels much better not having to answer to a boss.”

Ji’s move from manufacturing into services mirrors a sweeping economic transition being championed by policymakers. The country needs services to become a bigger part of the economy to accommodate new entrants into the labor force, workers being shed by the old smokestack industries, and farm laborers joining the relentless march to the cities. Service industries now employ more than 43 percent of China’s 776 million workers, up more than 8 percentage points from 2012, and more than in manufacturing. In developed countries, it ranges between 70 percent and 80 percent.