Smarter and higher quality: China's service consumption boom powers new growth engine

"I am about to start my performance," a robot says as it begins serving customers in a restaurant at Hangzhou's Wensan Digital Life Block.

Inside the nearly 600-square-meter venue in east China's Zhejiang Province, diners are greeted by the unusual host — robots handle almost everything, from stir-frying dishes and cooking noodles to brewing coffee, delivering meals and cleaning floors.

The futuristic scene offers a glimpse into a broader transformation underway across China where high-quality, experience-driven services are reshaping everyday life and consumption choices.

Official data revealed Wednesday from the National Bureau of Statistics shows that China's consumer market continued to operate steadily in May, with the consumer price index (CPI) rising 1.2% year-on-year, unchanged from April, while core CPI excluding food and energy increased 1.1%. Within this stable price environment, service prices rose 0.8% from a year earlier, contributing approximately 0.4 percentage points to CPI growth.

As spending patterns evolve, policymakers also seek to unlock domestic demand. The Political Bureau of the Communist Party of China (CPC) Central Committee, during a meeting in April to analyze and study the current economic situation and economic work, emphasized the need to tap consumption potential, expand the supply of high-quality goods and services and promote consumption upgrading as part of the country's economic development strategy.

Service consumption gains momentum

The Ministry of Commerce launched the 2026 Service Consumption Season campaign on June 1, with more than 160 promotional events to be held throughout the year to stimulate spending in tourism, culture, sports, healthcare, elderly care and other service industries.

Across the country, the service sector is emerging as one of the strongest drivers of economic growth with new business models and consumption scenarios.

Southwest China's Sichuan Province is developing experience-oriented travel products. During this year's May Day holiday, Xingwen Stone Sea scenic area in Yibin, a UNESCO Global Geopark, introduced low-altitude sightseeing flights for the first time, allowing visitors to view the region's dramatic karst landscapes from the air.

Meanwhile, the integration of culture, tourism and sports is generating new growth opportunities. During the May Day holiday, sales revenue in cultural services and sports services rose by 42.3% and 44.1%, respectively, from a year earlier, according to value-added tax invoice data cited by authorities.

In east China's Jiangsu Province, the 2026 Jiangsu Football City League has become a catalyst for local consumption. In Suzhou's historic Tongli Ancient Town, organizers transformed the scenic water-town destination into a "second venue" for match watching, attracting more than 70,000 visitors on match day, double the previous day's tourist volume.

Combined with trade-in programs for consumer goods and various ticket-based promotional campaigns, these innovations are helping service consumption expand rapidly while encouraging business model innovation.

From ownership to experience

China's consumption patterns are undergoing a profound structural shift.

Consumers are increasingly prioritizing experiences over material possessions, driving demand for tourism, cultural activities, sports, healthcare, elderly care and education services.

According to official data, service consumption accounted for 46.1% of China's per-capita consumer spending in 2025, approaching half of total household consumption expenditure. Per-capita spending on services reached 13,602 yuan, while service retail sales increased 5.5% year-on-year, outpacing goods retail sales growth.

The trend is being supported by rising incomes and demographic changes. From 2020 to 2025, per-capita service expenditure grew at an average annual rate of 8.5%. The expansion of the service economy is also creating employment opportunities.

New occupations, such as live-streaming product promoters, food delivery riders, ride-hailing drivers and data analysts have become familiar parts of daily life. Service industries now employ roughly half of China's workforce, reinforcing their role as the country's primary job creator.

As China's economy continues its transition toward a more service-oriented structure, the National Development and Reform Commission (NDRC) projects that the country's service sector will exceed 100 trillion yuan (about $14.5 trillion) during the 2026–2030 period.

Upgrading capacity, unlocking potential

China's 15th Five-Year Plan (2026–2030) places strong emphasis on improving the quality, efficiency and competitiveness of the service sector while strengthening its role in industrial upgrading, employment creation and improving living standards.

One priority is the development of high-end producer services.

At a humanoid robot data-training center in Beijing's Shijingshan District, more than 100 employees work in positions ranging from robot training and data verification to maintenance and operations, helping machines learn smarter through continuous testing and refinement.

Industry analysts expect China's software and information service sector to maintain annual growth of around 12% over the next five years. The market for AI application services is also forecast to surpass 800 billion yuan (around $118.08 billion).

Policy support is accelerating the transformation. The Ministry of Industry and Information Technology and other agencies are promoting service-oriented manufacturing, while provinces such as Guangdong are strengthening the integration of technology and finance to support innovation-driven enterprises.

At the same time, China is pushing for higher-quality and more accessible consumer services.

Local governments are expanding 15-minute community life circles, allowing residents to access leisure, elderly care, childcare, dining and other daily services close to home. Research suggests that community-based services have already developed into a market worth approximately 10 trillion yuan (around $1.48 trillion).

Emerging business models, such as embedded community elderly-care facilities, smart housekeeping services and agriculture-culture-tourism integrated programs, are helping address new demands generated by population aging and urbanization.

Preliminary estimates suggest that per-capita service consumption in China could exceed 18,000 yuan by 2030, while the share of services in household consumption may rise to between 55% and 60%.

As robots serve meals in Hangzhou and low-altitude flights open new tourism experiences in Sichuan, China's evolving service economy is increasingly becoming a key force driving domestic demand, technological innovation and long-term economic growth.