At a high-stakes meeting on July 30, the Communist Party of China Political Bureau laid out a fresh roadmap for the Chinese mainland’s economic journey. Facing escalating global trade frictions and demographic headwinds, the world’s second-largest economy is turning the spotlight inward—championing a services-led growth model.
With 2025 marking the final year of the 14th Five-Year Plan, officials offered early glimpses of the priorities for 2026–2030. Gone is the singular focus on export-driven manufacturing; in its place stands a push to ignite a consumption boom anchored by high-value services—from healthcare and eldercare to cloud computing and fintech.
Since 1978, China’s rise has been fueled by its integration into global supply chains. Trade once made up over 64 percent of GDP, but geopolitical tensions, tech sanctions and calls for “de-risking” have exposed vulnerabilities in a factory-heavy model. As supply chains fragment, a new strategy is emerging.
Enter the "dual circulation" approach, introduced in 2020. By boosting domestic demand, policymakers aim to reduce dependence on foreign markets. Today, household consumption accounts for just 40 percent of GDP—well below the 55 to 70 percent typical of advanced economies—underscoring vast potential for growth.
Data from 2024 reveals a stark imbalance: a $768 billion goods surplus versus a $229 billion services deficit. In other words, factories are humming while service providers scramble to catch up. Bridging that gap may define the next chapter of China’s economic story.
Success hinges on deep reforms: modernizing regulations, investing in digital infrastructure and fostering innovation across sectors. The upcoming Five-Year Plan is poised to lay the groundwork for a mature services ecosystem, with policies targeting talent development, market access and private sector participation.
For global citizens, entrepreneurs and changemakers, this pivot brings fresh opportunities. A booming domestic services market could fuel startups in green tech, health innovation and immersive travel experiences, while reshaping global supply chains and investment flows.
As the Chinese mainland charts a path from “world factory” to innovation hub, the dual circulation strategy offers a data-driven blueprint for sustainable, service-driven growth—one that balances global engagement with robust domestic demand.
Reference(s):
cgtn.com
