China's consumption engine gains momentum

At the Hainan expo, services consumption in sectors such as low-altitude aviation, the silver economy, health and wellness, and AI-powered innovation products from global firms, dominated many booths.

OSIM, which has participated in the expo for five consecutive years, debuted its latest massage chair and its flagship uDream wellness chair, integrating cutting-edge AI that monitors stress and customizes multi-sensory relaxation.

OSIM sees the expo as a key platform to engage in meaningful conversations with Chinese consumers, said Lin Xiaohui, deputy general manager of brand management and marketing of OSIM North Asia.

"As China's consumption structure upgrades, service-related spending is playing an increasingly important role, especially in sectors like healthcare, education and entertainment," said Zhang Tianbing, leader of the consumer products and retail sector of Deloitte Asia Pacific.

"Demographic shifts, including an aging population and smaller household sizes, are reshaping consumer preferences in China," Zhang said, adding that health consciousness and digital consumption habits are spreading increasingly across all age groups.

Notably, China's services consumption is expanding at a faster pace than that of goods, with retail sales of services growing 5 percent year-on-year in the first quarter.

From January to March, the country's per capita spending on services increased 5.4 percent year-on-year and accounted for 43.4 percent of its total per capita consumer spending, official data showed.

Kuang Xianming, vice-president of the China Institute for Reform and Development, projects that services consumption will exceed 50 percent of China's total consumption by 2030, signaling the country's pivotal shift to a services-driven economy. "This expanding market is highly attractive to foreign companies."

Chinese policymakers have positioned the expansion of domestic demand as the paramount priority on the government's economic work agenda for this year, emphasizing increased spending power, improved expectations and strengthened consumer confidence.

The country's focus on domestic tasks is particularly meaningful against the backdrop of a complex international landscape. By maintaining high-standard opening-up and promoting a more sustainable consumption recovery, China seeks to share its opportunities with the global community.

"Expanding domestic consumption is not only key to high-quality development, but also a strategic move amid global economic uncertainties," Kuang told Xinhua News Agency.

More importantly, as China continues to open up, this ever-expanding market will become a shared market, he said.

"We see a lot of encouraging signs by the Chinese government to help boost local consumption. So we're very excited about what's to come," said Mike Hofmann, managing director at Tricker's China, one of the United Kingdom's oldest established shoemakers. This year was the second time Tricker's had exhibited at the expo, helping them raise brand awareness in China.

In a key move in China's opening-up strategy, Hainan Free Trade Port is set to begin independent Customs operations by the end of the year, and global enterprises are eyeing the vast opportunities that come with open trade.

"Its success will not only benefit China, but also provide valuable insights for economies worldwide," said Zhang Xiangchen, deputy director-general of the World Trade Organization.

Douglas Alexander, minister of state of the British Department for Business and Trade, is also looking forward to the launch of the Hainan Free Trade Port's independent operations.

"The UK is keen to explore the opportunities for free and open trade, which benefits both Chinese and British firms," Alexander said. The UK was the guest country of honor at this year's expo and showcased 53 brands across the fashion, beauty, homeware, health and jewelry industries, doubling its 2024 presence.

Dong Debiao, partner at Deloitte China strategy and client center, told Xinhua that he expects the independent Customs operations of the Hainan Free Trade Port to drive consumption further.

Hainan is also likely to become a consumption hub linking China and Southeast Asia, with unique advantages in the high-end retail and services trade sectors, he said.

Xinhua