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With the industry panel data of Zhejiang province, this paper tests the effect of various types of service industry on the competitiveness of manufacturing industry. The Empirical results show that the productive service industry exhibits a significant positive effect on both labor productivity and the contribution rate of total assets while the consumer service industry exhibits a significant negative effect on them. The results also show that scientific research service exhibits a lag positive effect on both labor productivity and the contribution rate of total assets. The conclusion implies that it should give priority to the development of producer services, with special emphasis on the development of scientific research services.