BEIJING, April 12, 2026 — As China enters the pivotal 15th Five-Year Plan period (2026-2030), the country’s top leadership has elevated the strategic importance of the service sector — already the largest pillar of its economy and a major engine of employment — to unprecedented heights, laying out a clear roadmap for its high-quality evolution.
President Xi Jinping, who also serves as General Secretary of the Communist Party of China Central Committee and Chairman of the Central Military Commission, delivered a key instruction at the first-ever national conference on the service sector held earlier this week, calling for fresh breakthroughs in advancing the sector’s high-quality development.
Official statistics from 2025 underscore just how central the service industry has become to China’s economic landscape: its added value topped 80 trillion yuan (approximately $11.65 trillion), accounting for 57.7% of national GDP. The sector contributed 61.4% of the country’s overall economic growth, a 3.7 percentage point increase from 2024, and supports roughly half of China’s total workforce.
Against a backdrop of persistent global economic volatility, the new policy focus on the service sector comes as China continues its structural transformation toward high-quality growth. Xi’s direction is expected to cement the sector’s critical role in driving industrial upgrading, fostering innovation, unlocking untapped domestic demand, and stabilizing the broader national economy.
While the sector has delivered strong foundational growth, policymakers have acknowledged pressing challenges that threaten its long-term progress. Persistent market entry barriers in key sub-sectors, an imbalanced supply structure, and a shortage of high-end service offerings have grown increasingly prominent. Addressing these gaps has been framed as a strategic priority to unlock the next phase of China’s economic expansion.
In his instruction, Xi outlined four core pillars for future development: demand-driven growth, breakthroughs in market-oriented reform, technological empowerment, and expanded opening-up and international cooperation. He called for the implementation of national initiatives to expand service capacity and upgrade quality, goals already enshrined in this year’s Government Work Report and the 15th Five-Year Plan outline.
Even as China continues to prioritize its world-leading manufacturing sector, Xi has long emphasized the critical role of services, which underpin both industrial production and household consumption. Over recent years, his on-the-ground inspections have included visits to financial and technology service providers, elderly care facilities, and cultural tourism destinations, highlighting the sector’s priority on the national policy agenda.
Already, targeted policy measures have begun rolling out across government agencies. Earlier this year, the Ministry of Commerce joined eight other departments to release the 2026 Work Plan for Improving Quality and Accessibility of Service Consumption, which focuses on upgrading service infrastructure while addressing pressing livelihood needs including elderly and childcare services.
Looking ahead, Xi has set clear priorities for sub-sector development: advancing producer services toward greater specialization and higher positions in the global value chain, fostering high-quality, diverse and accessible consumer services, and building globally competitive “China Services” brands.
Producer services — which range from research and development, design and inspection certification to information technology — are in particularly high demand as China scales up its advanced manufacturing sector. During a March 2026 inspection of Xiong’an New Area, the planned “future city” in Hebei Province, Xi called for clustered development of emerging and future-oriented industries, with robust growth in producer services to support the transformation and upgrading of traditional manufacturing.
Cheng Xiang, an analyst with Shenwan Hongyuan Securities, noted that producer services have already emerged as a high-growth investment focus, driven by deep integration with advanced manufacturing, favorable policy tailwinds, and massive untapped demand.
On the consumer side, growing urbanization and a steadily expanding middle class have shifted household spending priorities toward services, creating enormous potential to boost domestic demand. Xi has repeatedly outlined policy priorities for a wide range of consumer-facing service sectors tied to people’s livelihoods, from cultural tourism to elderly care.
At the December 2025 Central Economic Work Conference, Xi emphasized the need to remove unreasonable regulatory restrictions on consumption to unlock growth potential in service sectors including culture and tourism, sports events, catering, and health and wellness. During the Central Urban Work Conference in July 2025, he called for accelerated development of livelihood-focused services including healthcare and domestic services to adapt to shifting population and demand structures.
By upgrading consumption offerings, meeting growing personalized demand, and expanding the supply of inclusive, high-quality services, China can fully unlock the potential of service consumption, strengthening the resilience of domestic economic circulation as spending shifts from goods acquisition to high-quality services and experiences.
Alongside domestic reform and expansion, continued growth of the service sector will rely on deeper opening-up to international participation. In a 2025 letter to the China International Fair for Trade in Services (CIFTIS), Xi committed that China would accelerate the opening of its service market and advance high-quality development of trade in services.
In recent years, China has steadily eased foreign investment access restrictions and advanced orderly opening-up of sectors including telecommunications, internet services, education, culture and healthcare. It has also fostered service trade innovation through flagship platforms such as CIFTIS, and expanded its comprehensive service sector opening pilot program to 20 regions spanning all major regions of the country.
Analysts project that the new push from national leadership will trigger a fresh wave of opening-up, expansion and upgrading measures, injecting renewed momentum into the service sector and reinforcing its role as a core driver of China’s economic resilience.