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China's services sector on the rise, but economic imbalances persist

Published on Jan 20, 2014 2:43 PM

China is making some headway in restructuring its economy and revving up its domestic consumption growth engine, but it still has not weaned itself off a reliance on investments, which was the biggest driver of last year's 7.7 per cent GDP growth, analysts say.

The world's No. 2 economy kept its growth pace level from 2012, which saw the slowest expansion since 1999.

President Xi Jinping's administration has indicated its tolerance for slower growth to free up resources for reforms that can rebalance the economy by unleashing the spending power of its 1.3 billion population, while reining in state monopolies and excessive local government spending.

It is also looking to shift China from the world's low-cost factory to a services and high-tech powerhouse.

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