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Abstract
This study interprets the fast-growing tertiary sector in China, especially in 84 large cities, as a result of sectoral labor transition. Large cities in China mostly relied on the tertiary sector for urban job growth during the period from 1990 to 1997 and are ahead of the country in the sectoral labor transition. The tertiary labor share in a large city is not only associated with the per capita income, but also with the urbanization level within the city limit, the per capita foreign direct investment, and the history and size of the city. Compared with other parts of the world, China is more similar to developed countries (with a time lag) than to developing countries in the path of the sectoral labor transition. Yet, the sectoral labor transition (and the growth of the tertiary sector specifically) in China has been strongly influenced by government policies.
