Spatial Development of Producer Services in the Chinese Urban System

The Chinese economy has transformed from the development of industries in the early economic reform period of the 1980s to the development of service industries in the 2000s and, more recently, the emergence of producer service industries. Producer services have become increasingly important to the Chinese economy. Most studies on producer services in China mainly focus on individual cities. Spatial development of producer services at the regional and national levels is relatively less examined. In this paper we analyze the growth and location of producer services in the Chinese urban system. The study also shows that producer services are becoming spatially more concentrated across the urban system. As producer services that are important in generating economic development are more likely to be located in large metropolitan areas, they tend to reinforce the competitiveness of large cities. Moreover, the uneven spatial development of producer services suggests that small and medium cities need to conduct careful market studies and analyses on their ability to attract producer service industries before they initiate large central business district development projects and invest in massive construction of offices.