China's service industry is emerging as a new engine of economic growth, with producer services moving up the value chain and consumer services delivering greater convenience and higher quality. The country's Government Work Report for the first time this year called for expanding capacity and improving quality in the service industry, urging development of producer services such as finance, information technology, modern logistics, intellectual property and testing, while promoting consumer services to become high-quality, diversified and more convenient.
"The goal is a dual-track upgrade. Producer services become more specialized and high-end, while consumer services turn more convenient and quality-driven. This is how services become a true growth engine," said Zhao Zhongxiu, president of the University of International Business and Economics.
In manufacturing-linked producer services, Chinese companies, such as Chongqing Zongsen Aviation Engine Manufacturing, are moving up the value chain. The company has expanded from parts production to full lifecycle aviation solutions.
"We've moved beyond parts manufacturing to full lifecycle aviation solutions -- design, production, maintenance, training -- all in one place. It's specialized service that drives competitiveness," said Zhou Dan, general manager of Chongqing Zonsen Aviation Engine Manufacturing Co., Ltd.
Digital transformation is accelerating the upgrade, with artificial intelligence, cloud computing and big data reshaping both industrial and consumer services.
At the Boao Lecheng Medical Tourism Zone in south China's Hainan Province, patients are accessing cutting-edge treatments not yet available elsewhere.
"We bring global medical innovation to Chinese patients. Faster approvals, international standards, personalized care. Quality and convenience together," said Yu Runhong, director of the International Medical Division at Lecheng Pilot Zone Administration.
The results are showing in the numbers. In 2025, services attracted nearly 70 percent of China's utilized foreign investment. Service trade exceeded one trillion U.S. dollars for the first time, hitting a record high.
"Services are now China's calling card for foreign investment. High-end logistics, research and development services, digital trade -- multinationals see opportunity and they're investing for the long term," said Zhao.
The transformation is already visible across industries. Smarter supply chains are shortening delivery times for manufacturers, telemedicine is extending healthcare to rural communities, and fintech is making financial services more accessible. Together, these innovations show how expanding capacity and improving quality are turning services from a supporting role into a leading driver of China's next phase of economic growth.
Service industry emerges as new engine for China's economic growth
