With Chinese households still reluctant to spend on big-ticket items, Beijing is relying on new levers to revive consumption: experiences and everyday services.

China’s State Council on Thursday launched work plan Policymakers are seeking to increase consumption’s share of the economy over the next five years, boosting consumption of services ranging from cruise and yacht tourism to aged care services and more sporting events.

The notice stated that the plan aims to “accelerate the cultivation of new driving forces for service consumption” and “improve and expand service supply.”

Beijing’s renewed push comes as officials try to boost domestic demand as a prolonged slump in the property market, a gloomy job market and income uncertainty make consumers wary of big purchases. Concerns are growing that the export boom that cushioned the economic impact of U.S. tariffs last year may be unsustainable.

While Beijing has introduced trade-in subsidies to spur sales of cars and appliances, the rebound in spending has been uneven.

Retail sales growth 3.7% in 2025, lagging Total industrial output value increased by 5.9% and wider Economic expansion of 5%. The consumption indicator fell back to 0.9% in December, while Consumer inflation flat Producer prices fell for a third consecutive year last year, extending a period of deflation that weighed on corporate profits and wage expectations.

Early indicators compiled by China’s Beige Book showed that services consumption slowed sharply in January, with widespread weakness in most sub-sectors including tourism, hotels and restaurant chains.

Even so, economists point to a clear shift in household preferences, with consumers increasingly allocating spending to services rather than goods.

The People’s Bank of China’s quarterly survey for the fourth quarter of 2025 showed that the proportion of respondents planning to increase spending on social entertainment activities in the next three months reached an eight-year high. People’s interest in spending more on “big-ticket” items remains well below pre-pandemic levels.

At the same time, consumer focus appears to be changing.

“Emotional gratification is playing a growing role in retail spending, with people increasingly focusing on buying for self-expression and experiences rather than material wealth or brand reputation,” said S&P Global’s team of analysts.

The rating agency predicts that China’s retail sales (excluding oil) will increase by 2.7% in 2026 compared with last year, with the services sector growing by 5.5%.

in a work plan China’s State Council released news on Thursday that it would support “tourism-oriented” upgrades to railway stations and scenic railway lines, as well as improvements to yachting infrastructure, including public docks and berths.

The authorities also said they would expand visa-free entry to more countries and add tax refund points at border ports to promote inbound tourism.

The plan also calls for cultivating new types of service consumption related to “emotional experiences” and urges policymakers to innovate rules while taking a more prudent regulatory approach to emerging industries.

For live performances and sports events, the authorities said they will increase supply, encourage the introduction of top international events, and promote high-quality outdoor sports destinations.

Encourage banks to expand credit to consumer service companies, and allow qualified companies in culture, tourism, education, sports, and household services to raise funds through the issuance of bonds.

The Economist Intelligence Unit said a more developed services sector was closely linked to China’s political goals at a time when traditional methods of stimulating retail demand through price cuts and promotions had proven “ineffective”.

Chinese policymakers are interested in services for a variety of reasons. Per capita service consumption share Last year it rose slightly to 46.1%but still significant Lower than many global peersindicating room for growth.

Services are generally more labor-intensive than manufacturing and remain China’s largest source of employment, according to the Economist Intelligence Unit. Expanding the sector could help stabilize youth unemployment, which has risen to worrying levels in recent years.

According to China’s 2020 census, the tertiary industry accounts for more than 48% of job seekers aged 16 to 24.

According to statistics, China’s final consumption expenditure will account for 56.6% of GDP in 2024 World Bank datahigher than the low of 49.4% in 2010, compared with 82.9% in the United States, 81.7% in the United Kingdom, and 74.7% in Japan.