China lags on service sector growth

China's non-manufacturing purchasing managers' index (PMI) for October climbed to 55.5, up from a final reading of 53.7 in September, according to the latest statistics from the National Bureau of Statistics (NBS). Official data also show that the proportion of value added output from China's tertiary industry to its gross domestic product (GDP) rose to 43.4 percent at the end of 2011, up from 41.5 percent in 2002.

The strengthening performance of China's service sector has many believing that a complete structural transformation of the national economy is right around the corner. Sadly, this is far from the case and China still has a long way to go.

In many of the world's advanced industrial nations, tertiary sector output accounts for over 70 percent of GDP. Even in many developing countries, it's not uncommon to see services account for more than 45 percent of a country's overall economic output.

The author is Yu Muzhan, an economic commentator.

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