Recovery of service industry will act as booster for economy

Electricity data is a barometer of economic performance. As the effects of the government's stabilizing economic policies and measures have become more obvious over the past five months, the electricity consumption of the country has increased steadily. Electricity consumption in May was 722.2 billion kilowatt hours, up 7.4 percent year-on-year. The power consumption of the service sector last month was 128.5 billion kWh, an increase of 20.9 percent, compared with a growth of 16.9 percent and 4.1 percent for agriculture and industry respectively.

That reflects the important role of the service sector in driving the overall economic recovery. The national service industry production index from January to May grew 9.1 percent year-on-year, 0.7 percentage points faster than the January-April period.

As residents' consumption shows a trend of transformation from commodity consumption to service consumption, the service sector's role as a key engine fostering deep integration of industries is becoming more prominent.

As the foundation for economic recovery is still not solid, the government should therefore prioritize the recovery of the service sector in its efforts to expand domestic demand. For instance, it needs to actively promote supply-side structural reform in the service industry, and promote the specialization and extension of the producer service industries in the direction of the higher end of the value chain. It is clear that to unleash the potential of domestic demand is almost impossible without an upgraded service sector.

Besides, the service sector, as a major job creator, involves a wide range of industries featuring high employment flexibility that can absorb different levels of job hunters, as well as those released from villages and factories due to the mechanization of agriculture and the increasingly wider application of industrial robots.

The unemployment rate of those aged 16 to 24 in the country has been remaining high for months — hitting 20.8 percent in May. The government should try to further boost employment in the service sector, particularly in the transportation, accommodation, catering, tourism and other related industries that have recovered robustly this year, by making its support for the small enterprises and individual household businesses in these industries more targeted and much stronger.

The recovery of the service sector can also serve as a more visible and effective booster to the people's confidence with the overall recovery of the economy.