Technological and Industrial History of The People's Republic of China - Service Industry

Service Industry

The service sector expanded quickly during the reform period, making up for major deficiencies that had developed in the preceding quarter century. In the 1950s and 1960s, services were regarded as nonproductive and were therefore neglected. During the Cultural Revolution (1966–76), they were relentlessly attacked as "remnants of capitalism." By the late 1970s, the service trades, such as food service, barbering, laundering, tailoring, and repair work, were seriously understaffed and were far from able to meet the needs of the population. Furthermore, they were all concentrated in large, inefficient state-owned units. The service occupations requiring advanced training, such as health care, education, and legal services, were decimated by the breakdown of the education system during the Cultural Revolution decade.

Revival of the service sector was a well-publicized goal of the reform program. Legalization of private and collective enterprise quickly led to the appearance of tinkers, cobblers, tailors, barbers, and small food-service stands, particularly in the free markets. Between 1978 and 1985, the number of people engaged in the service trades, retail sales, and catering grew from only 6.1 million to over 25 million, of whom 21 million were in collective or individual enterprises. In 1986 the government further stimulated the growth of the sector by leasing to private individuals or groups a large number of small, state-owned, service establishments, including restaurants, repair shops, and barber shops, that had consistently been operating at a loss under state management.

Other service sectors that employed significant quantities of labor included health care, education and culture, and government administration. These sectors were important to the national economy and employed over 25 million people.

China produced nearly all of its own medicines and medical equipment, but most hospitals were poorly equipped by Western standards. A more serious shortage was the relatively small number of doctors and other highly trained medical personnel. In 1985 some 4.3 million people worked in health-care institutions. Of these, 1.4 million were doctors – including 336,000 doctors of traditional (rather than modern) medicine, 637,000 were nurses, and 1.4 million were midwives, laboratory technicians, pharmacists, and other technical personnel. The number of doctors of modern medicine grew by over 35 percent between 1978 and 1985, and renewed contact with the West opened training opportunities in Europe, the United States, and Japan.

Only a little over 10 percent of all Chinese received free medical care. Free care was provided to government workers, military personnel, teachers, college students, and workers in state-owned enterprises. A portion of the medical expenses incurred by their dependent family members was covered by the work units. Most rural towns and villages operated voluntary cooperative medical systems (see Medicine in China).

Educational and cultural institutions employed 12.7 million people in 1985. This total included 871,000 teachers and staff in institutions of higher education, an increase of 68 percent over the number in 1978, reflecting the intensive reconstruction of the education system in the 1980s. There were nearly 8 million people working in government administration in 1985.