China Seeks to Boost Services Sector and Innovation to Realize Economic Potential
• China needs to strengthen its services sector and increase investment in breakthrough "zero-to-one" innovation to realize its economic potential • The country's producer services lag developed nations, making up just a third of the services sector compared to 45% on average • This gap contributes to China's large trade deficit in services of $94.3 billion in 2022 • More R&D spending focused on basic research and zero-to-one innovation can help grow producer services • Financial services and policies should be tailored to serve manufacturers and address their funding needs