Service Industry, Urbanization and Economic Growth: Based on the Empirical Analysis of China during 1979-2008

This paper studies the relationship among service industry, urbanization and economy growth of China since the reform and opening up by establishing a multi-variable econometric model and using the Johanson cointegration test and impulse response function. We found that the service development and economic growth affected each other in both directions in the long-term, and the economic growth raises the level of urbanization in China.