Small steps in service sector to make big strides in economy

"This is much more convenient for consumers, and the vegetable prices are much fairer because without having to go through wholesalers, transaction costs have been reduced," says Ma.

Liu became especially well known in the community after creating the WeChat selling model, and his sales have increased nearly 30 percent every month since.

Experts say that supporting firms in the service industry and encouraging the development of small businesses like Liu's, has become a priority for the Chinese government－a strong new source of growth at a time of persistent economic difficulties. Creating more job opportunities is also expected to be prioritized.

Wang Tao, chief economist in China at UBS AG, says targeting such areas with reforms will become crucial, "including further cuts in administrative red-tape and service sector entry barriers".

The country's senior leadership elaborated on their image of an economic "new normal" in China at the 2014 Economic Work Conference, which has now provided a framework for policy making this year.

"A transformation of the country's growth model is necessary to focus more on efficiency of resource allocation, innovation and higher productivity," says Wang.

"But such a transformation has to take place with the market playing a bigger role and the government also has to loosen policy constraints, break down internal market barriers, and foster competition."

Many more small firms, such as Liu's vegetable supply business, are expected in the coming year, especially those targeting particular niche markets and meeting specific consumer demand.

Results from the Third National Economic Census, launched by the State Council and the National Bureau of Statistics in 2013, already show the advances made by the service industry, and the rapid changes to the economic structure in the five years since 2009.

In 2013, enterprises in the service industry made up 74.7 percent of the national total, up 5.7 percentage points from five years before. Employees in the service sector accounted for 45.9 percent of the nation's total workforce, compared with 42.4 percent.

In contrast, the proportion of companies in the industrial sector shrank to 25.3 percent, down 5.7 percentage points during the same period, while the number of industrial employees dropped by 3.5 percentage points to 54.1 percent at the end of 2013, according to recent NBS figures.

The results also indicated that the contribution of the service sector to the gross domestic product had risen steadily from 44.6 percent to 46.1 percent in 2013. The contribution is expected to be 48.5 percent in 2014, predicts the Chinese Academy of Social Sciences.

In the first three quarters of 2014, the service sector expanded 7.9 percent year-on-year, outperforming the 7.4 percent overall growth in the manufacturing industry. The NBS is scheduled to release the whole year economic indicators on Tuesday.

Zhu Haibin, chief economist in China at JPMorgan Chase & Co, says this rebalancing of the service and manufacturing sectors has "notable implications for the labor market in 2014".

"In particular, as the service sector is generally more labor-intensive, such structural adjustment in the economy should support employment creation and helps stabilize the labor market, amid a gradual slowing of the overall economy," he says.

According to official data, in the first nine months of 2014, 10.82 million new jobs were created, well ahead of the government's full-year target of 10 million.

The GDP growth, however, was 7.4 percent in the first three quarters of 2014, lower than the annual target of 7.5 percent.

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