On Development And Influencing Factors Of Producer Services In China

The global industrial structure has changed significantly in the last ten years. Service industries are flourishing and becoming an important sector of the economy in most countries. Service industries include producer services and consumer services. Producer services which provide services to producers are drawing more attention. Since reform and openess, China’s economy has grown very fast. But the success of economic development has brought over-use of resources and serious environmental pollution. To ensure sustainable development, we need to create a new growth model which use less natural resources and help reduce pollution. An important piece of the new model will be service industries, especially the producer services. The development of producer services will promote competitive power of industry, optimize the economic structure, reduce social costs and increase economic efficiency. Producer services in China currently represent a small fraction of the economy and show big difference between different regions. Now, government departments of all ranks attach importance to producer services.To make good system environment for producer services, we should understand its situation, development stage, trend in development and the influencing factor. This thesis studies from the above aspects, trying to do something for the development of producer services in China. The main research works as follows:First, this thesis analyses the current situation of China’s producer services from four aspects; gross input-output, inner industrial structure, productivity and industrial relationships. It finds that the nominal gross product of producer services grows fast, but the actual gross product grows slowly. The investment in the fixed assets of producer services takes up2/3of services, while the output and employment only takes up about1/3. As for inner industrial structure, this thesis stduies three industries of producer services, which are transport service, financial industry and real estate industry. On product and employment proportion, transport service is the biggest of the three industries. On investment in the fixed assets, real estate industry is the largest, which takes up60percent of the whole producer services investment in the fixed assets. Comparative labor productivity of all industries of producer services is bigger than1, which shows the productivity of producer services is greater than the average. The industrial relationship analysis indicates that the producer services don’t effectively play a big role to the manufacturing industry until now.Secondly, this thesis explores the internal and external factors which drive the creation and development of producer services, and puts forward a producer services’ development theory. Taking transport service, financial industry and real estate industry as representative of producer services, this thesis explores the development level for producer services’in every provincial city. The next level of analysis divides the country into three regions; the eastland, the midland and the west. The thesis examines the three industries in each of the three regions, and advances a theory of producer services’development stages. Then it builds Panel Data models to analyze the influence of investment and employment on industry development. The research shows that transport service has entered the development period in both the eastland and the midland, but is only in the germination stage in the west. Financial industry is in development period in the eastland, and in the germination stage in both the midland and the west. Real estate industry is in the maturation period in the eastland, and in the development period in both the midland and the west. The data shows the eastland has the most development overall for producer services, and the west has the least.Thirdly, based on the theory of labour supply and demand from microeconomics, the thesis analyzes the influences of technical level, human capital, wage, output and employment urbanization on producer services. It uses the Panel Data model to research the influence factors of producer services’ employment. The result shows economic development, urbanization and output level have a positive effect on employment, while human capital and wage level create negative impact.Fourthly, using ECM and Panel Data Model, the paper explores the long and short term influences of manufacturing sector, investment, employment, regional economy and urbanization on producer services in the three regions. The result shows that economic growth has a positive effect on producer services in every region,in both the long and short run, while other factors show varying influences in the three regions. In the long run, in the eastland, both investment and employment level will create growth of producer services, while manufacturing sector has crowding-out effect.In the midland, investment, employment level and urbanization have negative effect on producer services, regardless of long run or short run; in the west, except for the negative effect of manufacturing sector, other factors all support producer services. In the short run, investment in the eastland, urbanization in the midland and the west all show negative effects, other influences show positive effects.Spatial economics theory, is used to measure the agglomeration level of producer services in China, by using spatial Gini coefficient and location quotient index. This analysus identifies the advantaged regions of every industry and the advantaged industries of every region. It puts forward influencing factors hypothesis and analyze the hypotheses with a Panel Data model. The result shows, as for influencing factors of agglomeration of producer services, manufacturing share, innovation density, ratio of dependence on foreign trade, geographical position and unemployment rate are all centripetal forces, while road net density is a centrifugal force. Scale economy is centripetal force theoretically, but here it does not show notable impact.Finally, it makes a comparative analysis of China’s producer services to producer services in developed countries and other "BRICS" countries. Comparisons are made with countries such as the United States, Japan, Germany, France and the United Kingdom, China’s producer services’ proportion of both gross product and employment are all about half of that of the developed countries. China’s producer services’ proportion of gross product has declined over the past ten years. This tendency is opposite that the pattern of the developed countries, and resembles to other "BRICS" countries, such as Brazil, Russia and South Africa.