China doubles down on service spending to rebalance growth

The new push is designed to lift household spending at a time when goods demand is soft and property remains a drag. Agencies set out to open more service industries to private and foreign investment, while local governments are encouraged to expand events and experiences, from sports to cultural festivals, that boost weekend and evening “night economy” traffic. The focus on inbound spending complements domestic measures: easier entry for visitors, simpler tax refunds, and expanded acceptance of foreign bank cards are intended to convert tourist arrivals into higher on-the-ground outlays.

Financing levers accompany the market-access changes. Central funds and local special bonds are earmarked for service-sector infrastructure, including culture, tourism, childcare, eldercare and sports facilities. Banks are being nudged to extend more credit to consumer services, with an emphasis on smaller operators that need working capital to upgrade venues, digitalize operations and add staff. The result is a mix of demand-side nudges and supply-side upgrades meant to raise both the frequency and quality of service consumption.

The test is execution. Sustained gains depend on job and income confidence, as well as on whether service providers translate policy support into better experiences and value for money. Near-term benchmarks include holiday bookings, services PMI readings and the pace of inbound recovery. If momentum holds and financing reaches operators on the ground, the services tilt could take pressure off goods and property, and give the broader economy a more durable, consumption-led footing.