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China Gets More Than Ever From Services, Just Not Enough

  • China bulls see the rise as evidence of economic rebalancing
  • Bears point to the weakness in traditional growth drivers

For the first time, China last year saw service industries make up more than half of the economy as the nation’s swelling middle class demanded more in everything from entertainment to health care and financial products.

The sector accounted for 50.5 percent of gross domestic product in 2015, the most on record, government data showed Tuesday. The bad news is that the gain also reflects declines in swathes of China’s industrial complex plagued by too much expansion in previous years. Output of everything from steel to cement to electricity fell.