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Service Sector Growth in China and India: A Comparison


  • Yanrui Wu

    () (UWA Business School, The University of Western Australia)


China and India have recently achieved spectacular economic growth. However, services in these two Asian giants have played a very different role. In India, the service sector contributes to more than 54 per cent of GDP while its GDP share in China is much smaller (below 41 per cent in 2004). To provide an explanation for the contrasting trajectories, this paper examines and compares service sector developments in these two Asian giants. It investigates the determinants of demand for services and sheds light on the outlook for service sector growth in the two countries.

Suggested Citation

  • Yanrui Wu, 2007. "Service Sector Growth in China and India: A Comparison," Economics Discussion / Working Papers 07-04, The University of Western Australia, Department of Economics.
  • Handle: RePEc:uwa:wpaper:07-04

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    References listed on IDEAS

    1. Park, Se-Hark, 1989. "Linkages between industry and services and their implications for urban employment generation in developing countries," Journal of Development Economics, Elsevier, vol. 30(2), pages 359-379, April.
    2. World Bank, 2005. "World Development Indicators 2005," World Bank Publications, The World Bank, number 12426.
    3. Poonam Gupta & James P. F. Gordon, 2004. "Understanding India’s Services Revolution," IMF Working Papers 04/171, International Monetary Fund.
    4. repec:wbk:wbpubs:12425 is not listed on IDEAS
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    Cited by:

    1. Nath, Hiranya K. & Liu, Lirong & Tochkov, Kiril, 2015. "Comparative advantages in U.S. bilateral services trade with China and India," Journal of Asian Economics, Elsevier, vol. 38(C), pages 79-92.
    2. Douhan, Robin & Nordberg, Anders, 2007. "Is the elephant stepping on its trunk? The problem of India´s unbalanced growth," Working Paper Series 2007:16, Uppsala University, Department of Economics.
    3. Mallick, Jagannath, 2017. "Structural Change and Productivity Growth in India and the People’s Republic of China," ADBI Working Papers 656, Asian Development Bank Institute.
    4. Shingal, ANIRUDH, 2010. "Services growth and convergence: Getting India’s states together," MPRA Paper 32813, University Library of Munich, Germany.
    5. Uwitonze, Eric & Heshmati, Almas, 2016. "Service Sector Development and its Determinants in Rwanda," IZA Discussion Papers 10117, Institute for the Study of Labor (IZA).
    6. Wu, Yanrui, 2008. "Comparing Regional Development in China and India," WIDER Working Paper Series 013, World Institute for Development Economic Research (UNU-WIDER).

    More about this item


    China and India; Asia; service sector; growth determinants and regression analysis;

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