THE government’s efforts to put China’s economy on a more sustainable growth path are focusing on shifting from investment-intensive manufacturing jobs to the services sector, but clumsy attempts to force the transition could do more harm than good.

    As China looks set to post its slowest annual economic growth in decades today, officials hope that a rapidly expanding services sector will generate more than enough jobs to offset losses in inefficient “sunset” industries which have been heavily reliant on export demand.

    By doing so, they hope to mimic the success of the United States, which started out as a manufacturing powerhouse but ended up with 80 percent of its economy driven by services — in particular in finance and software.

    But some fear China’s approach may risk duplicating failed attempts in Latin American countries, where halving the share of manufacturing in their economies in favor of services failed to pay off, leaving them in the infamous “middle-income trap,” where wages have risen but economic growth slows.

    “It’s too early for China to give up manufacturing,” said Zhu Baoliang, chief economist at the State Information Center, a top government think tank in Beijing.

    Many believe that China is headed straight into this trap, given signs that its productivity growth has gone into reverse since the global financial crisis.

    Services accounted for 46.9 percent of the economy in 2013, while the secondary sector — which includes manufacturing and construction — accounted for 43.7 percent.

    The issue, economists say, is that not all services jobs are created equal; most laid-off factory workers are not being retrained for higher paying jobs in finance or software, but rather made into minions at restaurants and amusement parks.

    That may keep official unemployment statistics low, but the long-term economic contribution is debatable.

    “Services have become a key driver of employment, but the problem is services are less productive than manufacturing,” said Qu Hongbin, chief China economist at HSBC in Hong Kong, adding he thinks the trend could be a “prelude” to China’s economy becoming more similar to South America’s than North America’s.(SD-Agencies)