China‘s Service Sector Surges as Consumers Shift Spending Habits
SHANGHAI – China’s consumer spending on services is experiencing a notable upswing, signaling a potential shift in economic drivers as the country navigates a complex recovery. Recent data indicates a growing preference for experiences – travel, entertainment, and personal care – over traditional goods purchases, bolstering sectors previously hampered by pandemic-related restrictions and economic uncertainty. This trend is reflected in the strong performance of companies like online travel agency Tongcheng, backed by Tencent, which reported a profit climb fueled by China’s rebounding travel sector.
The move towards services represents a significant evolution in Chinese consumer behavior, traditionally focused on savings and tangible assets. This shift is driven by a combination of factors,including rising disposable incomes,a growing middle class,and a desire for lifestyle improvements. The increased spending is impacting a wide range of industries, from tourism and hospitality to healthcare and education, and is prompting institutions like Duke Kunshan University to adapt to evolving economic landscapes and talent needs. This evolving consumer landscape is crucial for China’s economic future, as services are expected to become an increasingly crucial engine of growth, potentially offsetting challenges in the property market and global trade.
Tongcheng, such as, saw its profit climb on the back of China’s travel gains, according to Forbes reporting on November 25, 2025. The company’s success mirrors a broader trend of increased domestic tourism, as Chinese consumers opt for travel within the country. This surge in demand is benefiting not only travel agencies but also hotels, restaurants, and local attractions.
Beyond travel, other service sectors are also witnessing robust growth. Increased spending on healthcare, education, and personal care services demonstrates a growing emphasis on quality of life and personal well-being. This trend is particularly noticeable among younger consumers, who are more willing to spend on experiences and self-enhancement.
The changing dynamics are also influencing educational institutions.Duke Kunshan university, recently welcoming former CEIBS Dean John Quelch (as reported by forbes on December 29, 2023), is adapting its curriculum and programs to meet the demands of a service-driven economy. The university’s focus on innovation and entrepreneurship is aimed at preparing students for careers in emerging service industries.
Looking ahead, the continued growth of China’s service sector will be closely watched by economists and investors alike. The sustainability of this trend will depend on factors such as government policies, income growth, and consumer confidence. However, the current trajectory suggests that services are poised to play an increasingly prominent role in shaping China’s economic future.