Significant economic and spatial transformation has taken place in China since the late
1970s, when China began to abandon the self-reliance approach and adopted open door
and reform policy. The process of transformation has been characterized by a sharp
increase of non-agricultural activities, which has contributed to the country’s staggering
economic growth and urban development. In 1952, the secondary and the tertiary sector in
China accounted for 49.5% of the GDP and only 16.5% of total employment. In 2001, their
shares were 84.8 and 50.0%, respectively (Table 1). Apart from the continuous
proportional decline of the primary sector in the national economy, the rise of the tertiary
sector in China has been remarkable. During the period between 1952 and 1978, the
secondary sector increased by 27.3% in GDP and by 9.9% in employment. The tertiary
industry increased only by 3.1% in employment but decreased by 4.9% in GDP. Between
1978 and 2001, however, the development of the tertiary sector eclipsed that of the
secondary sector. The tertiary sector gained 9.9% points in GDP and 15.5% points in
employment, while the secondary sector merely gained 2.9 and 5.0% in output and
employment, respectively. The emphasis of growth has gradually shifted from the
secondary sector to the tertiary sector in the past two decades and as a result, the tertiary
sector’s share of total employment has outperformed that of the secondary sector since
1994.