The world's fastest growing economy, China, known to be a leader in the manufacturing sector, is now leapfrogging in the service sector as well. The country's services' share of the economy in the year 2004 jumped by 9% accounting to 41%, drawing close to the 46% share of manufacturing; and China is well on its way to becoming a global economic powerhouse. Now as China's service sector rises, the world is weighing its pros and cons and the impact it would have on China and the rest of the world. And more so, its Asian counterpart, India, known to be a master of services with a 52% share of the sector towards the country's GDP. While China has slowly and steadily improved its service sector along with its excellence in manufacturing, India is yet to prove its mettle in the manufacturing sector. However, China's success in services and the impact on Indian businesses is yet to be seen.
The slow, but steady rise of China's service sector is forcing s to wear their thinking caps once again. The country seems to be escaping from the clutches of manufacturing and is broadening its horizons. According to China's National Bureau of Statistics, a major chunk of the country's GDP comes from three categories in the service sector. The first being wholesale, retail and catering; the second being transport, storage, postal and telecommunications; and the third category being the booming real estate business, which is attracting foreign investments as well. Kiran Nanda, Director and Economic Advisor, IMC Economic Research & Training Foundation, Indian Merchants' Chamber, an apex body for trade, commerce and industry says, "China is on the way to become a leading economic powerhouse of the world. In quite a few sectors, it has already attained the top position. In order to grow further, it is tapping the service sector. Boost to the service sector is inevitable as the growth journey conventionally is considered to be moving from agriculture to industry and manufacturing to service sector."
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