China’s Economy Accelerates: Consumption Fuels Growth
China’s economy is showcasing robust growth, largely driven by a revitalized consumer market. In the first half of 2025, retail sales surged, demonstrating consumption’s pivotal role as the primary engine for national economic expansion.
Consumption: A Powerful Economic Driver
Data reveals that total retail sales of consumer goods experienced a 5% year-on-year increase. Consumption’s contribution to economic growth reached an impressive 52%, underscoring its vital function as a stabilizing force. This positive trend accelerated in the second quarter, showing a 0.8 percentage point increase over the first quarter.
Policy Support Ignites Consumer Vitality
Effective government policies, including initiatives for domestic demand and product upgrades, have successfully unleashed pent-up consumer desire. For example, at a Beijing Suning.com store, promotions motivated customers like **Ms. Wang** to purchase higher-end air conditioning units at significant discounts.
Service Sector and Holiday Spending Boom
The consumer landscape is marked by accelerating service consumption, with holiday spending playing a crucial role. Upgraded consumption and green initiatives are gaining traction. “China Travel” and “China Shopping” trends continue to dominate, alongside the emergence of novel consumption models and business formats.
Travel and Experiential Consumption Surge
The domestic tourism market is experiencing a significant upswing. Attractions like Shanghai’s first Legoland and the Xinjiang Ahe Highway opening to traffic have drawn large crowds. Resorts in Changbai Mountain are reporting high occupancy during summer operations, capitalizing on the “22°C summer” appeal.
Event-driven tourism is particularly strong. The “Su Super League” football matches boost local catering and accommodation, while music festivals are highly anticipated. The upcoming Chengdu “Cactus Music Festival” has garnered substantial interest, with tens of thousands indicating their intent to attend.
Service retail sales grew by 5.3% year-on-year in the first half of 2025, outpacing commodity retail. The National Information Center reports a 15.7% rise in the life service consumption popularity index, with leisure, entertainment, catering, and accommodation sectors showing substantial increases.
Business Innovation Unlocks New Markets
Innovative business formats are proving highly effective in stimulating consumption. Chongqing’s vibrant night economy, highlighted by events like the Chongqing Life Festival and drone shows, draws significant crowds and spending.
New consumption patterns, emphasizing personalized experiences and emotional connection, are flourishing. The popularity of the LABUBU plush toy illustrates this, becoming a symbol of emotional expression and cultural identity for young people.
Regional initiatives are supporting this trend. Beijing’s fashion consumption plan, Guangxi’s late-night dining promotions, Shanxi’s intangible cultural heritage brand creation, and Guangzhou’s “first-time economies” all cater to evolving consumer preferences.
Technological advancements are enhancing consumption scenarios. Beijing’s International Cultural and Tourism Consumption Expo showcased new tech products. Shaoxing’s smart healthcare system provides elderly citizens with round-the-clock monitoring and remote medical assistance.
“Compound consumption scenarios such as ‘acting arts +’ events +’ integrate various elements such as culture, tourism, and sports to provide consumers with diversified consumption experience, promote consumption upgrades, extend the consumption chain, and form a multi-level consumption structure,” stated **Hong Yong**, an expert at the China Digital Integration 50 Forum.
“China Travel” and “China Shopping” Drive Inbound Tourism
International visitors are increasingly drawn to China, with enhanced visa-free policies facilitating tourism and spending. **Isabel**, a Swiss tourist, plans a trip encompassing iconic landmarks and leveraging China’s convenient infrastructure like shared bikes and mobile payments.
“‘China travel’ and ‘China shopping’ continue to heat up, especially after the expansion of visa-free ‘moments circle’, more tourists came to China for tourism, which also drove domestic consumption,” explained **Sheng Laiyun**, deputy director of the National Bureau of Statistics. During recent holidays, inbound travel for visa-exempt nationals saw significant year-on-year increases.
Shanghai alone processed over 1,000 departure tax refund registrations, leading to an 85% year-on-year increase in such sales in the first half of 2025. This service benefited thousands of travelers from numerous countries and regions.
China’s expanded 240-hour transit visa-free policy, refined tax refund procedures, and “Purchase in China” campaigns are enhancing the shopping experience for foreigners. Thoughtful services, from translation devices to multilingual guides and accessible mobile payment options, are receiving high praise.
“The experience of traveling to China from visas to transportation, accommodation, language communication, etc. is very comfortable. China’s transportation system is well-developed and convenient, especially the wide coverage of the high-speed rail network, which allows me to easily go to various cities,” shared Brazilian tourist **Russel Danitez**.
**Dong Chao**, director of the Ministry of Commerce Research Institute’s Institute of Distribution and Consumption, noted that the popularity of “China Travel” and “China Shopping” reflects China’s rich cultural heritage, advanced manufacturing, and improving tourism and shopping infrastructure, showcasing an open and confident market.
