Economic Transition, Urban Hierarchy, and Service Industry Growth in China

The service industry in China has been undergoing rapid growth, especially since the early 1990s. However, little research has been conducted regarding its characteristics, spatial patterns and dynamics. Based on the theories of economic growth, economic transition and urban hierarchy, this paper develops an analytical framework for elucidating the growth of the service industry in China. We find that cities with a high increment in the service industry tend to be located in coastal areas, and mainly constitute megacities and large, highly developed cities. Cities with higher administrative rank, such as centrally administrated municipalities, cities designated in the State Plan and provincial capitals, maintain relatively high growth in the service industry. It is concluded that China's economic transition and urban hierarchy play significant roles in the growth of the service industry, suggesting that service industry growth in China does not strictly adhere to growth patterns observed in Western countries.