Lifting the industry higher with "Chinese services"

Editor’s Note

The State Council recently issued the “Opinions on Promoting the Expansion and Quality Improvement of the Service Industry,” proposing that by 2030, the total scale of the service industry will reach 100 trillion yuan. Over the next five years, where will the 20 trillion yuan in growth come from? This report explores pathways for high-quality development of the service industry through key areas such as industrial upgrading, cross-sector integration, people’s livelihood consumption, and expanding opening-up.

In Foshan, Guangdong, an industrial design company redesigns the appearance and interaction logic of traditional home appliances, driving the premium of smart home products by over 30%; thousands of miles away in Shanghai, a smart production scheduling system connects to a shipbuilding workshop, reducing the construction cycle of large LNG ships from 38 months to 16 months.

From industrial design that highlights product value to intelligent brains that drive cost reduction and efficiency, the productive service industry is accelerating its integration into all links of the industrial chain, promoting China’s manufacturing to new heights.

Recently, the State Council issued the “Opinions on Promoting the Expansion and Quality Improvement of the Service Industry” (hereinafter referred to as “Opinions”), proposing to extend the productive service industry toward specialization and higher value chain levels, providing strong support for accelerating the construction of a modern industrial system.

“Without high-level services, there can be no high-quality manufacturing. We need to support higher-end ‘Made in China’ with stronger ‘Chinese services,’ promoting mutual promotion and complementarity between Chinese design and Chinese products,” said Shen Zhulin, deputy director of the National Development and Reform Commission, at a recent routine policy briefing by the State Council Information Office.

An Important Support for Industrial Upgrading

Entering Anta Group’s integrated logistics industrial park, dozens of box-type storage robots scan codes, handle, and pick items seamlessly, increasing warehouse operation efficiency by 200%; at Jomoo Group’s offline stores, customized kitchen and bathroom products based on consumer preferences generate 3D renderings with one click, and can be delivered from smart factories within a day; the China People’s Bank’s Zhongzheng Accounts Receivable Financing Service Platform has been implemented, allowing upstream small and medium suppliers to obtain precise financial support within 30 minutes using receivables data.

From “people looking for goods” to “goods finding people,” from single assembly lines to complete service chains, the productive service industry, through modern logistics, software and information services, financial services, and other links, bridges technological innovation and advanced manufacturing, pushing traditional industries toward intelligent, green, and high-end development.

After years of development, China has built the world’s largest, most comprehensive, and most complete manufacturing system, with manufacturing value added ranking first globally for 16 consecutive years. Wei Qijia, researcher at the National Information Center of the National Development and Reform Commission, said that based on the advantages of scale, system, and some leading fields formed by the industrial system, accelerating the development of new productive forces requires the productive service industry to organically integrate with other industries at a higher level, fostering more original technologies, smoothing factor allocation channels, and breaking through bottlenecks in technological and industrial innovation.

Currently, China has entered a critical period of industrial structure transformation and overall leap in the industrial system. Issues such as core technology “stuck neck” and low added value in some fields cannot be ignored; the proportion of productive services in total manufacturing input remains below 13%, leaving significant room for improvement.

“Traditional industries are not synonymous with backwardness; they can also ‘sprout new shoots’ through digital and intelligent transformation,” said Xu Yanling, researcher at the Beijing Academy of Scientific and Technological Innovation. A modern industrial system requires matching modern infrastructure and high-quality, efficient services to shift development advantages from scale to quality, efficiency, and innovation.

Hong Qunlian, director of the Service Industry Research Office at the Institute of Industrial Economics and Technological Economics, National Development and Reform Commission, believes that promoting the expansion and quality improvement of the productive service industry essentially involves strengthening the resilience of the industrial chain and consolidating the foundation of a manufacturing powerhouse. By injecting high-end service elements, it promotes the transformation of manufacturing from pure production to “manufacturing + services,” further advancing toward the high end of the value chain.

Addressing Weak Links Along the Entire Chain

For a long time, the imbalance of one leg long and one leg short between manufacturing and productive services has been a key bottleneck restricting industrial transformation and upgrading.

According to Hong Qunlian, the core issue lies in the mismatch between the demand of the real economy and the productive service industry. For example, poor coordination of technological services, insufficient professional services such as pilot testing and成果孵化, and low efficiency in modern logistics and financial services have limited the role of the productive service industry as an “adhesive” for industry development and as a “booster” for transformation and upgrading.

Focusing on strengthening weak links along the entire chain, the “Opinions” deploys six key areas, systematically arranging 17 critical links in technological services, modern logistics, software and information services, supply chain finance, energy conservation and environmental protection, and business services.

Shen Zhulin said that on the production side, the “Opinions” focuses on improving the professionalism of the productive service industry; on the market side, it emphasizes further amplifying service value, driving the extension of productive services toward R&D and market, forming a “smile curve.”

“This deployment closely aligns with China’s urgent needs for industrial upgrading. By filling gaps in key areas of the productive service industry, it promotes front-end breakthroughs in manufacturing, improves efficiency in the middle, and increases value at the back end,” Hong Qunlian said.

Specifically, technological services at the front end of the industrial chain are crucial for solving “stuck neck” problems. The “Opinions” aims to enhance support for R&D design, intellectual property, technology成果转化, and testing and certification, fostering innovation and strengthening core competitiveness. Modern logistics, supply chain finance, software and information services, and energy-saving environmental services are closely related to manufacturing processes, serving as vital guarantees for cost reduction, efficiency improvement, smooth capital flow, and green development. Business services at the back end of the industrial chain, such as consulting and branding, can better achieve efficient management through professionalization.

“Strengthening weak links across the entire chain of productive services is an inevitable requirement for high-quality development of the real economy, playing a ‘twice the result with half the effort’ role,” Wei Qijia said. The “Opinions” provide a reliable path for extending the productive service industry toward specialization and higher value chain levels, conforming to the intrinsic laws of the transformation and upgrading of the real economy, pinpointing key areas for quality and efficiency improvements, and promoting the aggregation and flow of advanced, high-quality production factors toward new productive forces.

Digital and Intelligent Empowerment to Enhance Increment

Digital and intelligent transformation is the core engine of the new round of technological revolution and industrial change, and also the key to expanding and improving the service industry. The “Opinions” clearly states the need to improve the standards, integration, and internationalization of the service industry’s digital and intelligent development.

“The ‘Four Modernizations’ action path is a strategic consideration aligned with development trends. Among them, digital and intelligent transformation requires reshaping service forms with digital and intelligent technologies, improving service efficiency, and promoting data, algorithms, and scenario innovation to facilitate the transformation of traditional services into smart services,” Shen Zhulin said.

The reshaping of service forms through digital and intelligent technologies is bringing new incremental growth to industry development. Industrial internet breaks down information silos, flexible production makes manufacturing more adaptable… By the end of last year, 89.6% of large-scale industrial enterprises in China had completed digital transformation, and the digital equipment penetration rate reached 57.7%.

As an important part of the productive service industry, software and information technology services provide strong support for industry to reach new heights. Giji Xin, vice minister of the Ministry of Industry and Information Technology, said that the next step will accelerate innovation in the software and information technology services sector, especially in AI-enabled information services, through initiatives like “AI + Software,” further strengthening open-source ecosystems, and upgrading foundational and industrial software to intelligent levels. Additionally, efforts will be made to improve the digital and intelligent transformation service system for manufacturing, cultivate high-quality digital transformation service providers through classified and graded approaches, and orderly promote computing power deployment and edge computing infrastructure,完善智算云服务体系。

Hong Qunlian believes that accelerating the implementation of “small, fast, light, and precise” digital solutions in small and medium-sized enterprises is also crucial. Localities should strengthen support foundations, build integrated, efficient, and high-quality infrastructure, focus on regularly diagnosing real pain points in key industrial chains, and precisely release service chain lists.

For enterprises, in manufacturing, they should break free from reliance on low-end processing, strengthen investment in productive services based on operational realities, internalize core services like R&D design and branding into strategic assets, and accelerate the transformation toward “products + services.” In production services, they should focus on niche segments, deepen specialization, shift from price competition to innovation, and strive to develop professional and differentiated service capabilities.

“The shortcomings and bottlenecks in the development of the service industry are precisely where high-quality development lies and where potential resides,” Shen Zhulin said. We must seize the opportunities brought by the new round of technological revolution and industrial change, lead industrial innovation through technological innovation, promote the digital and intelligent development of the service industry, further improve development efficiency, and cultivate competitive advantages. (Reporter: Ji Wenhui)