Plan to supercharge services potential

China has rolled out a set of guidelines to upgrade its services sector, where significant consumption potential remains to be unlocked to help rebalance the world's second-largest economy and sustain its long-term growth, economists and executives said.

For Chinese consumers, the shift promises more choice, higher quality and greater convenience, they noted. For domestic and foreign service providers alike, China's fast-expanding services market means broader development opportunities.

In late April, the State Council, China's Cabinet, released plans to improve the capacity and quality of the services sector, with the goal of growing its total scale to 100 trillion yuan ($14.65 trillion) by 2030.

Dedicated efforts will be made to steer producer services toward "greater specialization and higher positions in the value chain", according to the plans, while making consumer services "more quality-oriented, diversified and convenient".

More "China services brands" will be fostered by 2030, with the sector's global competitiveness and influence significantly enhanced, and people's sense of gain steadily improving, the plans said.

In recent times, China has attached greater importance to the development of its services sector. The country held its first national conference on the services sector in early April, while its latest five-year plan also calls for improving the sector's quality, efficiency and competitiveness.

China's services sector has achieved steady growth in recent years, with its value-added reaching 80.9 trillion yuan in 2025, accounting for 57.7 percent of GDP and contributing 61.4 percent to economic growth, data from the National Bureau of Statistics showed.

Enhancing producer services has become a central pillar of China's services sector development, with executives pointing to significant untapped potential that could boost growth and drive industrial transformation.

China's producer services sector, which includes logistics, finance, R&D, design and IT services, accounted for less than 35 percent of GDP in 2025, said Jean Lu, Standard Chartered Bank's CEO for China, noting that in advanced economies, that figure typically ranges from 40 to 50 percent.

"This gap indicates that China's manufacturing supply chains still have substantial room to extend into service-related activities, offering considerable growth potential for the economy," Lu said.

Xu Shaofeng, senior vice-president of Schneider Electric, said that the services sector can help manufacturing move toward higher-end, smarter and greener production through technology empowerment, value enhancement and business model innovation.

This, in turn, boosts product value, brand visibility and supply chain efficiency, while manufacturing upgrading creates even broader space for service providers, Xu said.

"Many companies now face challenges in their transformation, making their need for professional services more urgent than ever. Services have shifted from a 'nice-to-have' to a 'must-have' for competitiveness and value creation," Xu added.

The value added of information transmission, software and information technology services rose 10.6 percent year-on-year in the January-March period, while leasing and business services expanded 12.2 percent, according to the NBS.

In addition to boosting producer services, emphasis should also be given to consumer services, as China's service retail sales grew 5.5 percent year-on-year in the first quarter, outpacing goods retail by 3.3 percentage points.

"In recent years, as living standards have risen, Chinese households have shifted from a goods-dominated consumption model to one where goods and services carry equal weight," Kong Dejun, director-general of the Ministry of Commerce's trade in services department, said at a February news conference.

From 2020 to 2025, per capita spending on services grew at an average annual rate of 8.5 percent, ministry data showed. Its share of total household expenditure rose by 3.5 percentage points over the same period, reaching 46.1 percent in 2025.

Mao Yibing, president of Marriott International Greater China, said that in the consumer services sector, China's market is unleashing new opportunities. Demand for quality consumption remains strong, and consumers are paying increasing attention to experiences.

The vast potential of China's leisure travel market is particularly evident, with weekend getaways, family trips, cultural exploration and sports entertainment emerging as key priorities for Chinese travelers, Mao said.

Mao noted that the hotelier will continue expanding its presence in first-tier and emerging first-tier cities, popular tourist destinations, and across business and leisure travel segments, aiming to capture a larger share of one of the world's fastest-growing service consumption markets, she added.

Greater openness is also imperative to advance the high-quality growth of the services industry, as the country will steadily expand its pilot opening-up programs in areas including value-added telecommunications, biotechnology and wholly foreign-owned hospitals, according to the State Council plans.

China will also improve the management of the negative list for cross-border trade in services and build demonstration zones for the innovative development of trade in services.

"By orderly guiding more foreign-funded enterprises to participate in the development of China's services sector, we can effectively improve the quality of service supply," said Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation.

"Foreign companies entering the Chinese market gain vast opportunities, bring advanced concepts and technologies, and create complementarity and synergy with local firms," Zhou added.

Alex Gu, senior vice-president of Medtronic, said that China has been continuously improving the development environment for foreign-funded medical service providers and supporting their introduction of advanced overseas medical technologies and services to the Chinese market.

Last year, Medtronic launched its first digital medical innovation hub in China, focusing on the development of disease management solutions powered by artificial intelligence and big data.

"Leveraging this center, we hope to explore more personalized, intelligent and efficient treatment options, and transform Chinese medical practices into innovative models with global significance," Gu said.

wangkeju@chinadaily.com.cn