Online services drive economic growth and consumption

New enterprises and the development of new business models have become crucial drivers of growth and the structural transformation of China's economy, according to a report by the National Bureau of Statistics.

A mobile phone user uses the mobile app Meituan Dache, the car-hailing service of China's largest online and on-demand delivery platform Meituan-Dianping, in the app store on a smartphone in Shanghai, China, 21 March 2018. [Photo: IC]

From 2013 to 2017, China's GDP maintained an average annual growth rate of 7.1 percent, thanks in large part to the trend towards mass entrepreneurship and innovation. New enterprises and business models made up 15 percent of China's total GDP in 2016, and are growing at a rate faster than overall GDP.

The transformation and upgrade of the manufacturing industry has been accelerating, with energy-intensive industries continuing to contract, and industrial capacity utilization reaching 77 percent in 2017.

Along with supply-side structural reform, service industries have become a larger pillar supporting the national economy. Services now account for 51.6 percent of the economy, an increase of 6.3 percent compared to 2012.

The expansion of online services has been a driving force in service industry's growth. Between 2015 and 2017, revenue from online retail grew by an average of more than 30 percent a year. E-commerce has led to growth in post and express delivery services, just as the sharing economy has given a boost to parts of the transport industry. Housing rentals, finance, catering, and medical care have also been positively impacted by the ongoing development of the online services sector.

Consumption has also played a greater role in economic growth in China. Since 2016, there has been a boom in new services that have encouraged increased consumption. The growth in Online-to-Offline services such as online shopping, car and bicycle hailing, shared accommodation, medical care, and food deliver services are highly visible examples.