Compared with the development history of the service industry in developed countries and the status quo of the service industry in most emerging market countries, the development level of China’s service industry has remained at a low level for a long time, which is mainly reflected in that the overall proportion of the service industry is still relatively low and the producer service industry is underdeveloped. There are many reasons for this phenomenon, among which the distortion of the factor market is an important one. Based on the analysis of various factor market distortions such as land factor, capital factor, environment and natural resource factor, energy aspect, labor market, etc., we believe that China’s factor market distortion has an industrial bias, which has enabled industries to develop faster than before when the factor market is not distorted, and that is an important reason for the relatively slow development of China’s service industry.
