In his Government Work Report on Thursday, Premier Li Keqiang stressed the importance of supporting the service industry with preferential policies. In fact, the government should set up a more ambitious goal of the service industry in the 13th Five-Year Plan (2016-2020).

The transition from an economy dominated by manufacturing to one dominated by services will not only help to achieve the 7 percent GDP growth target at a time when exports and investment are losing steam, it will also help China avoid the middle-income trap.

In fact, the service industry has already grown quickly during the 12th Five-year Plan period (2011-15). Last year, the output of China's service industry was more than 30.7 trillion yuan ($4.9 trillion), 48.2 percent of GDP, 5.6 percentage points higher than the secondary industry.