China's service sector aims to beturning over 400 billion U.S. dollars worth of business a year by 2010, according to proposals put forward by the State Council, China's cabinet.

The proposals, published on Tuesday, say reforms should be deepened in the telecom, railway and civil aviation sectors, easier market access provided for investors in these areas, competition increased and non-state service enterprises fostered.

According to the proposals, by 2010 the service sector will contribute 43 percent of China's gross domestic product. The service sector will become dominant in some larger cities and will outperform the national GDP growth rate.

By 2020, services will account for more than 50 percent of China's GDP, the proposals say.

The proposals underline the need for further investment, including private investment, and preferential policies in the service sector.

Banks will be encouraged to lend to service enterprises which conform to state industrial policies, and aid extended to eligible service enterprises so that they can raise money on the domestic and overseas capital markets.