China's Service Industry Development Model Empirical Analysis

The prosperity of the service industry reflects the modernization of society. A country's development mainly experiences three phases, agricultualization, industrialization and post-industrialization or service industrialization. Currently, China is in the midst of industrialization, marching for a post industrialized society, the path towards which can not be easy. Due to its critical position, service industry is chosen as paper's theme, ranging from an analysis of current situation of service industry, economic mathematic models and policy proposals for the industry's development in china.This paper analyses the economic structure of China's service industry and its growth by means of quantity model. The character and innovation of this paper is the combination of Input-Output model and econometrics model in analyzing the service industry of China based on most up-to-date data, endowing the outcome of the research with realistic significance and a full picture of the industry.The paper is composed of 5 sectors. The first sector is introduction. The second is the current conditions of China's service industry. The third part supports the Input-Output model with real world data, focusing on the analysis of direct consumption coefficient, absolute consumption coefficient and influence coefficient so as to explain the relationship between different industries within service industry and its relationship with other industries, and gives needs factor's influence on service industry by analyzing inducing coefficient and needs factor, thereafter, indicate the effect of service industry on the whole national economy. The fourth part is about quantitive economy models and mainly discusses the change of added value of service industry and the factors influencing this change: the gross retail value of social commodities, freight ton-kilometers, passenger-kilometers, government expenditure, and finally comes to a forecast based on the difference of added value of service industry over time. The conclusion and suggestion is in the fifth part.The paper attempts to combine theoretical models with empirical analysis, so that Input-Output model and econometrics model are harmoniously merged to produce a comparison and structural analysis. The character and innovation of the paper is the use of latest and comprehensive data in establishing the Input-Output model and econometrics model. The advantages of both models lead to a conclusion with realistic significance. It is worth to mention that the Input-Output model makes use of the constant price Input-Output time series tables of 5 years range, 1987, 1992, 1997, 2002 and 2005.