Beijing is planning to introduce new measures to promote the consumption of services, betting that elderly care, healthcare and leisure can offset tepid demand for goods, reports Reuters, citing an unnamed policy advisor. Analysts say the plan’s success hinges on elevating household incomes and social welfare.
Beijing views labor-intensive services as a key to reorienting its economy toward consumption as it tries to wean itself off a traditional dependence on big-ticket investment and exports. Authorities are likely to unveil incentives, ease market barriers and invest in high-growth sectors to tackle supply gaps, but deeper reforms to elevate incomes and strengthen the safety net are critical, policy advisers and analysts say.
In contrast to China’s manufacturing sector—where supply often exceeds demand—the services sector faces chronic shortages because of underdevelopment and years of policy bias towards factories.
“Policymakers are placing greater emphasis on services consumption given its big potential,” said a policy adviser who requested anonymity because they were not authorised to speak publicly. “But expanding the sector will be a gradual process, aligned with the pace of economic transformation.”