State Council deliberates measures to promote service consumption
China’s economic policymakers continue to pay lip service to increasing service consumption.
On January 16, Premier Li Qiang chaired a State Council executive meeting that highlighted service consumption as a policy priority.
Some context: Retail sales data show a widening divergence between services and goods consumption, with services emerging as the primary source of consumption growth (NBS).
- In 2025, retail sales of services grew 5.5% year on year – 1.7 percentage points faster than retail sales of goods.
- Momentum strengthened toward year-end, with service-sector growth accelerating for a fourth consecutive month in December.
Li’s remarks suggest service-boosting policy will continue to emphasize the supply side, including (Xinhua):
- Supporting the rollout of new service business models and applications
- Shoring up service-sector credit systems, standards, and safety oversight
Li also noted that policymakers are drafting two additional consumption-related policy documents:
- The 15th Five-Year Plan (FYP) on expanding consumption
- An income growth plan for urban and rural residents
Get smart: The central government has never issued a FYP on boosting consumption – or a standalone plan explicitly focused on boosting income growth.
- The fact that both are now on the docket signals a shift toward placing consumption at the center of economic strategy.
Get smarter: So far, this shift in thinking has not been matched by strong political commitment or substantial fiscal resources.
- Service consumption, for example, is expanding largely because the economy is maturing, and growth would likely continue even without major new policy interventions.