What does a shift to services in China actually mean?

From my perspective as a cultural anthropologist, it means a shift to moving from a society where collective performance and production are central towards one where individual well-being and security are central. Services cannot be sold without customers being aware that they can be entitled to such services, that contracts are legally binding,  i.e. that service providers can be held accountable. And last but not least, an awareness needs to grow that customers need these services in the first place, which can only happen if the other conditions are met. That sense of entitlement and awareness is growing in China and it is a direct threat to the rule of the communist party. If your warranty isn’t legally binding or the insurance you bought isn’t paid out when needed or the fixed term mortgage not so fixed term after all, you need legal recourse and you need to be able to count on an independent judiciary that is interested in protecting you. But if the system, as it does now, favours party mandarins and their business entourage, then how can an economy, necessarily based on a solid egalitarian legal footing, grow?

It’s well and good to talk about how China needs to grow a services economy but most economists fail to see the social and political magnitude. The communist party is seeing it though and many in it consider the citizen emancipation that services bring a trap at the end of which citizens demand accountability.

No wonder Xi is beating the drum of nationalism so fervently, no wonder that his medicine for defeating corruption is crackdown rather than creating the independent judiciary required for the next phase of growth. At this stage in their economic growth, most other Asian nations such as South Korea or Taiwan abandoned authoritarianism in favour of democracy. It worked well for them and will work well for China too.