China will accelerate the development of production-oriented service industries in a bid to step up industrial restructuring and prop up economic growth.
Priorities will be given to the development of research and design, commercial services, marketing and after-sales services, and will be driven by the market and innovation, according to an executive meeting of the State Council chaired by Premier Li Keqiang on Wednesday.
The move is expected to stimulate domestic demand, boost social employment and improve people's livelihoods, as well as stabilize economic growth, according to the meeting.
Wang Jun, deputy director of the China Center For International Economic Exchanges' consultancy department, said the move indicated the country has started to tap the potential of industrial restructuring to maintain economic growth, rather than direct stimulus to investment and industry.
It will help improve growth quality and efficiency in the long run, he said.
Zhang Zhiqian, researcher with the Investment Research Institute under China Jianyin Investment, also endorsed the move that seeks impetus from structural adjustment, as the dependency on expanding investment would lead to serious side effects including overcapacity and environmental issues.
China's economic growth continued to shrink in the first quarter, as downward pressure still existed. However, the country's rapidly-growing service industry has been emerging as a new engine for its slowing economy.
In the January-March period, China's tertiary sector increased 7.8 percent year on year to 6.29 trillion yuan (1.02 trillion U.S. dollars), making up 49 percent of the country's GDP in the first quarter. Its growth pace was also faster than the 3.5 percent of agriculture and 7.3 percent of the industry sector.
According to the meeting, design and application of new materials, products and techniques will be strengthened. Improvements will be made in information technology and energy saving services, as well as logistics services for manufacturers.
The move will help the sector to move up the value chain, and prompt integrative development of the country's tertiary, agriculture and industry sectors, the meeting said.
"The high-tech production-oriented service industries will accelerate the country's industrial upgrade and prompt 'Made in China' to evolve to 'Created in China'," Zhang said.
In addition, financial services for the manufacturing of construction equipment, delivery vehicles and production line will be promoted, while the country will encourage service outsourcing and the nurturing of high-end talents.
The central government will ease market access to attract social capital to the industries, encouraging Chinese enterprises of the sectors to invest overseas and lifting access restrictions gradually for foreign companies on architectural design, accounting audit and commercial logistics.
Enterprises of research and design, inspection and certification, and energy saving will be allowed tax breaks that have been enjoyed by high-tech companies.
According to the meeting, value-added tax will be promoted to the entire tertiary sector and favorable policies will be introduced to build a sound environment for companies in production-oriented service industries.
In addition, the country will continue to develop service industries concerning daily life, such as health, elderly care and information consumption, in a bid to improve people's well-being and build a new engine for healthy economic and social development.
A draft of the Food Safety Law was approved at the meeting, which requires full supervision, stricter punishment, accountability, increased risk monitoring and improved food safety standards.
The draft is still subject to deliberation of the Standing Committee of the National People's Congress, according to the meeting.
Source: Xinhua
