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5 White Paper on the Business Environment in China
2.9 Services
THE SERVICE SECTOR, often denoted as tertiary Mainland economy’s composition.4
industry and involving the trade of non-tangible A stated goal for the 12th Five-Year Plan period is to
goods such as accountancy, advertising, nancial, legal and
information technology services, is enjoying greater emphasis increase the contribution of the Mainland’s service sector to
from both the government and the private sector as China overall GDP from 43 to 47 percent.7
moves gradually away from the manufacturing that has
characterized its rst 30 years since “opening up.” Reuters observes that “One caveat to development is the
need for a liberalized nancial sector, making it easier for non-
Vice Premier Wang Qishan was explicit in this emphasis in state rms and more small- and medium-enterprises to raise
his welcome remarks to the International Investment Forum funds via bank loans or the nancial markets.”8
2008 at the China International Fair for Investment and
Trade (CIFIT), held annually in Xiamen between September According to China’s National Bureau of Statistics (NBS),
8 and 11, o ering that “FDI will be encouraged to ow into the total added-value achieved by the nation’s service sector in
high-tech industry, modern agriculture, energy-saving and 2009 surpassed 13 trillion yuan. is estimate was, in fact, a
environmental-friendly industry, modern services and service revision of earlier reports placing the total at approximately
outsourcing businesses.”1 12 trillion yuan.9
Vice Premier Wang’s remarks echoed the 2007 “Opinions Illustrative of the service sector’s continuing progress is the
of the State Council concerning Accelerating the Development recent history of accountancy in China. As related by Vice
of the Service Sector,” which cited the 11th Five-year Plan’s Minister of Finance Jun Wang in 2006 to the 17th World
target that “the ratio of the added value of the service sector to Congress of Accountants, “To meet the demand of reform and
the GDP should have exceeded 50 percent” by 2020, among opening up, China recovered its certi ed public accountant
other metrics for the sector’s growth.2 (CPA) system in the early 1980s. In the early 1990s, China
opened its accounting market. And in the new century, the
e importance of the service industries to China’s country is actively promoting international convergence of
continuing economic growth is often noted by o cials. In accounting and auditing standards in accordance with the
addressing the inaugural meeting of China’s Service Trade development trend of global economy and international
Association in January of 2008, Vice Minister of Commerce standards.”10
Yi Xiaozhun noted that although the “service trade is an
important part of global trade… there is a great gap between e Vice Minister further reported that “the number of
service trade and the service industry in China, and there is accounting professionals has constantly increased. By the end
great potential for development.”3 of 2005, over 10 million people have got the Accounting
Quali cation Certi cate, more than 140,000 people have had
More recently, the broad o cial emphasis on the CPA quali cation, and around 5,700 accounting rms have
“transformation of the mode of development” continues to been established in China. e service provided by CPAs in
emphasize this shift in priorities. In mid-2010 it was estimated China has been extended from foreign-invested companies
that tertiary industry accounted for 43 percent of the nation’s at the beginning of reform and opening-up period to all the
GDP (compared to its 77 percent share of the United States areas at present including SOEs and listed companies.”10
economy).4
More recently, it was reported that by 2009 there were
By 2012, this gure hadn’t budged: a Reuters analysis in excess of 15 million holders of Accounting Quali cation
pegged services in China as “[accounting] for just 43 percent certi cates11 and 155,000 CPAs.12
of output, compared with well over 70 percent in Western
countries.”5 A more recent account of CPA numbers on the
Mainland provided by China Daily shows 80,000 working
2013’s gures saw a modest gain of 2 percent to reach 45 for accounting rms and an additional 80,000 working in
percent of output; services moreover “overtook manufacturing government agencies.13
as the country’s biggest employer in 2011” and “weathered the
global slowdown much better than the factory sector.”6 Further steps are being taken to bring the Chinese
Accounting Standards (CAS), released in early 2006, more in
is lack of movement on a critical metric suggests only line with International Financial Reporting Standards (IFRS).
limited success for an earlier strategy of tax increases for
manufacturing enterprises being o set with tax breaks for e Chinese standards, which became e ective January 1,
the service industry in order to further promote a shift in the 2007, for companies listed on exchanges, are encouraged for
private rms also, according to Director General Liu Yuting
212 of the Accounting Regulatory Department of the Ministry
2.9 Services
THE SERVICE SECTOR, often denoted as tertiary Mainland economy’s composition.4
industry and involving the trade of non-tangible A stated goal for the 12th Five-Year Plan period is to
goods such as accountancy, advertising, nancial, legal and
information technology services, is enjoying greater emphasis increase the contribution of the Mainland’s service sector to
from both the government and the private sector as China overall GDP from 43 to 47 percent.7
moves gradually away from the manufacturing that has
characterized its rst 30 years since “opening up.” Reuters observes that “One caveat to development is the
need for a liberalized nancial sector, making it easier for non-
Vice Premier Wang Qishan was explicit in this emphasis in state rms and more small- and medium-enterprises to raise
his welcome remarks to the International Investment Forum funds via bank loans or the nancial markets.”8
2008 at the China International Fair for Investment and
Trade (CIFIT), held annually in Xiamen between September According to China’s National Bureau of Statistics (NBS),
8 and 11, o ering that “FDI will be encouraged to ow into the total added-value achieved by the nation’s service sector in
high-tech industry, modern agriculture, energy-saving and 2009 surpassed 13 trillion yuan. is estimate was, in fact, a
environmental-friendly industry, modern services and service revision of earlier reports placing the total at approximately
outsourcing businesses.”1 12 trillion yuan.9
Vice Premier Wang’s remarks echoed the 2007 “Opinions Illustrative of the service sector’s continuing progress is the
of the State Council concerning Accelerating the Development recent history of accountancy in China. As related by Vice
of the Service Sector,” which cited the 11th Five-year Plan’s Minister of Finance Jun Wang in 2006 to the 17th World
target that “the ratio of the added value of the service sector to Congress of Accountants, “To meet the demand of reform and
the GDP should have exceeded 50 percent” by 2020, among opening up, China recovered its certi ed public accountant
other metrics for the sector’s growth.2 (CPA) system in the early 1980s. In the early 1990s, China
opened its accounting market. And in the new century, the
e importance of the service industries to China’s country is actively promoting international convergence of
continuing economic growth is often noted by o cials. In accounting and auditing standards in accordance with the
addressing the inaugural meeting of China’s Service Trade development trend of global economy and international
Association in January of 2008, Vice Minister of Commerce standards.”10
Yi Xiaozhun noted that although the “service trade is an
important part of global trade… there is a great gap between e Vice Minister further reported that “the number of
service trade and the service industry in China, and there is accounting professionals has constantly increased. By the end
great potential for development.”3 of 2005, over 10 million people have got the Accounting
Quali cation Certi cate, more than 140,000 people have had
More recently, the broad o cial emphasis on the CPA quali cation, and around 5,700 accounting rms have
“transformation of the mode of development” continues to been established in China. e service provided by CPAs in
emphasize this shift in priorities. In mid-2010 it was estimated China has been extended from foreign-invested companies
that tertiary industry accounted for 43 percent of the nation’s at the beginning of reform and opening-up period to all the
GDP (compared to its 77 percent share of the United States areas at present including SOEs and listed companies.”10
economy).4
More recently, it was reported that by 2009 there were
By 2012, this gure hadn’t budged: a Reuters analysis in excess of 15 million holders of Accounting Quali cation
pegged services in China as “[accounting] for just 43 percent certi cates11 and 155,000 CPAs.12
of output, compared with well over 70 percent in Western
countries.”5 A more recent account of CPA numbers on the
Mainland provided by China Daily shows 80,000 working
2013’s gures saw a modest gain of 2 percent to reach 45 for accounting rms and an additional 80,000 working in
percent of output; services moreover “overtook manufacturing government agencies.13
as the country’s biggest employer in 2011” and “weathered the
global slowdown much better than the factory sector.”6 Further steps are being taken to bring the Chinese
Accounting Standards (CAS), released in early 2006, more in
is lack of movement on a critical metric suggests only line with International Financial Reporting Standards (IFRS).
limited success for an earlier strategy of tax increases for
manufacturing enterprises being o set with tax breaks for e Chinese standards, which became e ective January 1,
the service industry in order to further promote a shift in the 2007, for companies listed on exchanges, are encouraged for
private rms also, according to Director General Liu Yuting
212 of the Accounting Regulatory Department of the Ministry
