At a critical juncture of transformation and upgrading, the Chinese mainland’s economy is witnessing a significant shift towards service consumption as a new engine for growth. In the first half of 2024, service consumption has emerged as a pivotal pillar, bolstering economic expansion and driving consumption.
Data from the National Bureau of Statistics (NBS) reveals that in the first six months of 2024, total retail sales of consumer goods reached 23.6 trillion yuan ($3.3 trillion), marking a year-on-year increase of 3.7 percent. Notably, retail sales of services surged by 7.5 percent, outpacing goods by 4.3 percentage points.
The contribution of the service industry to national economic growth and its value added as a percentage of GDP both surpassed 50 percent, underscoring the sector’s growing significance. Offline and contact-based consumption have rebounded swiftly, with service-oriented consumption on the rise, providing robust support for overall economic recovery.
As residents’ income levels improve and consumption preferences evolve, there is a growing demand for personalized, diversified, and high-quality services beyond basic living needs. Sales of upgraded goods are accelerating, with retail sales of communication equipment and sports and entertainment products by major enterprises increasing by 11.3 percent and 11.2 percent year on year, respectively. The strong performance of emerging consumer goods such as new energy vehicles and smart home appliances reflects consumers’ pursuit of a high-quality life.
The service sector is experiencing a vibrant resurgence, particularly in industries like catering, tourism, and cultural entertainment. During the Dragon Boat Festival holiday, the number of domestic tourists and their total expenditure increased by 6.3 percent and 8.1 percent year on year, respectively, highlighting the immense potential of service consumption.
The burgeoning service consumption is poised to continue driving economic growth, positioning the Chinese mainland’s economy towards a more sustainable and consumer-driven future.
Reference(s):
Service consumption: a new engine for China's economic growth
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