Since 2023, China's service industry has continued to expand more than expected, and the recently announced Caixin China service industry PMI in December 2023 recorded 529, an increase of 1 from the previous month4 percentage points, which is also significantly higher than the market ** value of 516, the highest in the past five months.
In the 12 months of 2023, Caixin China's service industry PMI is in the expansion range, indicating that the service industry continues to recover.
Since the gap between China's GDP and the United States is entirely caused by the service industry, in 2022, the added value of China's overall tertiary industry will be 895 trillion dollars, compared to about 20 trillion dollars in the United States, our country is only 44% equivalent to the United States. At the same time, among the world's major economies, the added value of the service industry as a proportion of GDP is generally significantly higher than that of the manufacturing industry.
In addition, the contribution weight of consumer spending to China's GDP is not only much lower than that of the United States, but also lower than the global average. Therefore, the continuous expansion of the service industry beyond expectations is of great significance to China's economy.
Economists at JPMorgan Chase and Morgan Stanley believe that in the future, consumption and services will become a new growth point for China's economy, China will become the world's largest consumer, and the value of services for China's GDP will also exceed that of goods.
The GDP gap between China and the United States is entirely due to the service sector
In 2022, China's GDP in dollar terms is roughly equivalent to 70% of that of the United States compared to the United States. The GDP gap between China and the United States is completely caused by the tertiary industry (service industry), from the comparison of GDP classification between China and the United States, it can be seen that the added value of China's primary industry (agriculture) and secondary industry (industrial manufacturing) are significantly higher than that of the United States, but the added value of the tertiary industry is only about 44% of that of the United States.
The added value of China's manufacturing and construction industries was 469 trillion dollars and 117 trillion US dollars, more than the United States, the added value of the United States manufacturing and construction industry is 29 trillion dollars and 1$1 trillion. China's manufacturing industry has obvious advantages in scale, with an annual added value of 1 in the United States61 times.
In the field of service industry, there is a big gap between China and the United States, and in 2022, the added value of China's overall tertiary industry will be 895 trillion dollars, compared to about 20 trillion dollars in the United States, our country is only 44% equivalent to the United States. Except for the construction industry, the added value of other subdivisions of China's service industry is significantly lower than that of the United States.
In 2022, the proportion of the added value of China's service industry and manufacturing industry to the overall GDP will be 5277% and 2770%, 75% and 11% in the United States, respectively. The proportion of GDP in China's service industry is significantly lower than that of the United States, and the proportion of manufacturing is significantly higher than that of the United States. The U.S. manufacturing sector accounts for only 11% of GDP, the lowest in recent years.
The high cost of manpower and the high fees of the service industry in the United States are not only the key reasons for the high output value of the service industry in the United States, but also the main reason why the overall GDP of the United States is higher than that of China
Since the number of Chinese is much larger than that of the United States, the business volume of various service industries is generally much higher than that of the United States, so the gap between the output value of the service industry between China and the United States is mainly caused by the high cost of the service industry in the United States.
The high cost of manpower and the high fees of the service industry in the United States are not only the key reasons for the high output value of the service industry in the United States, but also the main reason why the overall GDP of the United States is higher than that of China
Taking the express delivery industry as an example, according to the data of foreign consulting companies, in 2022, China's express parcel business volume will be 1105800 million pieces, accounting for 58% of the global business volume4%, with business revenue of about $153.7 billion. The U.S. express parcel business volume is 21.2 billion pieces, but the U.S. express delivery industry business revenue is as high as 198.1 billion US dollars. In other words, China's express delivery business volume is about 5 times that of the United States, while the business revenue is less than 80% of that of the United States. This fully illustrates that the U.S. express delivery industry** charges significantly higher than China's.
Services and consumption will become the key growth points of China's economy, and the value of services for GDP will exceed that of goods
JPMorgan economists said that in recent years, China** has been more inclined to support technological innovation and manufacturing upgrading, and has implemented strict regulatory policies for some service industries. This has led to a decline in the share of services in the economy, reversing the upward trend of the past decade.
China** is more inclined to support technological innovation and manufacturing upgrading, and has implemented strict regulatory policies for some service industries.
At the same time, after the epidemic, there has been a significant difference in the focus of economic development between China and the United States. JPMorgan Chase economists said that after the epidemic, China's economic policy has mainly supported production, investment and businesses, rather than households. As a result, production in China has recovered faster than consumption, and unlike the United States, which has primarily stimulated household consumption. Therefore, after the epidemic, China's industry will recover faster than in the United States.
After the pandemic, China's industry recovered faster than in the United States.
JPMorgan economists believe that as China ramps up efforts to stimulate consumption, consumption and services will be the main drivers of China's economic expansion rate of around 5% in 2024.
At the same time, Morgan Stanley also recently said that consumption and service industries will become an important growth point of China's economy in the future, and by 2034, China's consumption pattern will undergo great changes. As a result of this change, services will create more value for GDP than goods, i.e., services GDP > goods GDP.
Morgan Stanley expects China to become the world's largest consumer, and the size of China's consumer market is expected to double to 12$7 trillion, which is 9 more than it did in 2017$7 trillion is 30% higher. This means that the size of China's consumer market will remain at an annualized rate of 7 in the next decadeWith a growth rate of 9%, it has become one of the fastest-growing countries in the global consumer market.
At present, the size of China's commodity consumer market has surpassed that of the United States as the world's largest market. However, if service consumption is included, the current size of the US consumer market is still significantly larger than that of China.
Morgan Stanley said that if our first reality is realized, even if service consumption is included, China will become the world's largest consumer market in ten years. An important feature of the changes in China's consumer market over the next decade is that consumption of services exceeds consumption of goods.
In the future, as China increases the stimulation of consumption and service industries, consumption and services will not only become a new economic growth point in China, but also a huge change in China's consumption pattern, and the value of services for GDP in the future will exceed that of commodities.