Spatial spillovers in producer services–manufacturing coordination: evidence from Chinese provinces

Why this matters for everyday life

China’s factories make a huge share of the world’s products, from electronics to clothing. Less visible are the behind‑the‑scenes services—finance, logistics, design, digital platforms—that keep those factories running. This study asks how well these two sides of the economy work together across China’s provinces, how that balance has changed over the past decade, and how the progress of one region can spill over to its neighbors. The answers shed light on why some places move faster toward cleaner, smarter growth, while others lag behind.

Two pillars that must move in step

The authors treat producer services and manufacturing as two interlocking parts of one system. Producer services include activities such as transportation, information technology, research support, and other specialized business services that help factories plan, produce, and sell. Manufacturing provides the physical output and, in turn, creates demand for more advanced services. When one pillar grows much faster than the other, the system can become unbalanced: modern services may lack enough local factory clients, or factories may struggle without the right support services. To capture how well these two sides are keeping pace with each other, the researchers build a composite score called the coupling coordination degree, or CCD, for each province and year from 2013 to 2022.

How the scorecard was built

Instead of looking at a single number such as total output, the team folds in a wide mix of indicators for both sectors. These cover how big each sector is, how efficiently it uses workers and capital, how much room it has to grow, and what it delivers in terms of wages and jobs. A statistical method assigns objective weights to each indicator, emphasizing those that best distinguish provinces from one another. The resulting two sector scores are then combined into a single coordination index. A high CCD means that producer services and manufacturing in a province are both reasonably strong and well matched; a low CCD means they are either weak, out of balance, or both.

Uneven progress across the map

From 2013 to 2022, CCD rose steadily across China, showing that the two sectors are, on average, becoming more aligned. But most provinces still fall into what the authors call “dissonance” stages, meaning coordination is only partial. A clear east–central–west ladder appears: eastern coastal provinces generally have higher and faster‑rising CCD, central provinces sit in the middle, and western provinces lag behind. Only a minority of provinces have moved into truly coordinated territory, and none of them are in the west. Statistical tests of the spatial pattern show that neighboring provinces tend to look alike: high‑coordination provinces cluster together, as do low‑coordination ones, rather than being scattered randomly across the country.

What drives improvement—and how it spreads

To understand which local conditions matter most, the researchers examine the roles of public service spending, household income, the mix of industries, digital development, and the size of the labor force. They use spatial models that can separate effects within a province from knock‑on effects that spill across borders. Higher spending on general public services—such as infrastructure, education, and administration—raises coordination mostly within the province that makes the investment. By contrast, rising household incomes and stronger digital networks mainly help neighboring provinces, as consumer demand, information, and business practices cross provincial lines. Surprisingly, a heavier tilt in industrial structure and a larger labor force are linked to lower coordination locally, suggesting that simple expansion of factories or low‑skill workers does not automatically produce better integration with services.

Lessons for policy and regions

The findings suggest that both local action and cross‑regional cooperation are needed to move China’s factory‑service system onto a more advanced footing. Provinces can raise their own coordination scores by improving basic public services and the business environment that allow services and factories to work together smoothly. At the same time, because income growth and digital connections generate strong spillovers, it makes sense for neighboring regions to plan jointly—for example, by sharing digital platforms, logistics networks, and market access. For lagging western provinces, tapping into these spillovers may be a more realistic path forward than trying to copy the full industrial base of the east. Overall, the study shows that better “teamwork” between services and manufacturing is emerging, but it remains uneven—and understanding the geography of these links is key to building a more balanced and sustainable growth model.

Citation: Zhou, X., Xiong, Q., Zhuang, T. et al. Spatial spillovers in producer services–manufacturing coordination: evidence from Chinese provinces. Sci Rep 16, 10821 (2026). https://doi.org/10.1038/s41598-026-45596-w

Keywords: producer services, manufacturing, regional development, spatial spillovers, China