Government sets targets for the industry with huge growth potential

BEIJING - The government's goal of developing China's service industries during the 11th Five-Year Plan (2005-2010) may not be achieved within the timeframe, but the sector has huge potential for rapid growth during the next five years, said analysts.

"It will be very hard for us to reach the target according to the released economic data," said Dong Xian'an, chief economist with Industrial Securities.

In the first three quarters of 2010, services output accounted for 42.4 percent of GDP, down by 0.8 percentage points compared with the same period last year, and still 1.1 points lower than the five-year goal.

According to the 11th Five-Year Plan (2005-2010), the sector's proportion to GDP should be increased by 3 percentage points, and the ratio of those employed in the sector, as opposed to the total number of employees nationwide, was expected to grow by 4 percentage points.

To achieve the goal, the proportion of service employees needs to improve by 1.28 percentage points, given that in the previous four years the figure rose by 0.68 points on average.

Although the nation's service sector has realized rapid growth during the past five years, its development still lags behind the demand generated by fast economic growth, said Zhang Ping, chairman of the National Development and Reform Commission in a report to the National People's Congress Standing Committee on Wednesday.

"In 2009, the sector output only accounted for 43.4 percent of GDP, not only far below the level in developed countries, but also lower than the average level of developing countries," an official said under the condition of anonymity on Wednesday.

In addition, the amount invested in services, compared with in total domestic investment during the past five years has dropped compared with 2005.

Meanwhile, the trade deficit of services in 2009 increased by more than twice that of 2005, according to inf