President Xi Jinping has signaled a renewed focus on China’s services sector, calling for a demand- and tech-led strategy to reshape growth and create jobs. “The focus must be on demand-driven development and reforms as well as empowerment by technologies,” Xi said in a message to a two-day conference on the sector. Highlighting the role of services in tackling some of China’s biggest challenges, Xi said the sector had grown in scale and quality in recent years, supporting upgrades and people’s livelihoods, and stabilizing employment. “Moving forward, we shall promote specialization and professionalism for producer services to scale the value chain. For consumer services, we shall make them more diversified and accessible,” Xi said.
China’s total services output grew 5.4% year-on-year in 2025, outpacing overall economic growth of 5% and accounting for 57.7% of gross domestic product (GDP), according to the National Bureau of Statistics (NBS). The Bureau also reported especially strong performance in accommodation, catering, culture, sports and entertainment in the first two months of 2026, when the business activity index for each surpassed 60%. But the transition from a manufacturing-led economy to a knowledge- and service-driven growth model remains far from complete. The service sector’s added value accounts for more than 70% of GDP on average for OECD countries. The Chinese government increasingly views faster services growth as key to the recovery. Policymakers have moved beyond a narrower focus on manufacturing to explore how service-sector demand and supply could drive momentum, while also doubling down on technology, innovation and human capital.
Premier Li Qiang and Vice Premier Ding Xuexiang both attended the two-day conference. In his address, Li laid out priorities for the sector, stressing the need to adapt to demographic changes, evolving consumption patterns, and industrial transformation. “Efforts should be intensified to make consumption services inclusive, diversified, personalized and of higher quality, while accelerating the development of science and technology services and advanced manufacturing services,” he said. Li also urged cadres to treat the initiative as a national strategy and to ensure the sector was “invigorated while also well-regulated”. Ding called for deeper integration between manufacturing and services and the creation of a unified national market, stressing the importance of standardization and further opening up, the South China Morning Post reports.
