Analysis of the Impact of China's Consumption Promotion Policy Shift to the Service Industry

Based on the latest policy developments and market data analysis, the following is an in-depth analysis report on the impact of China’s consumption promotion policy shift to the service industry on the valuation and performance prospects of the consumption sector and listed service industry companies:

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Since 2025, the focus of China’s consumption promotion policies has shifted comprehensively from traditional goods consumption (such as trade-in programs for home appliances and automobiles) to

[1]. This transformation is based on the following underlying logics:

• Consumption Structure Upgrading
  : In 2025, service retail sales grew 5.5% year-on-year, 1.7 percentage points faster than goods retail sales; the proportion of service consumption expenditure in per capita household consumption expenditure reached 46.1%[1]
• Contribution to Economic Growth
  : In 2025, the contribution of final consumption expenditure to economic growth reached 52%, becoming the main driving force and stabilizer of economic growth[1]
• Policy Tool Innovation
  : The People’s Bank of China’s RMB 500 billion reloan for service consumption and elderly care, as well as the RMB 500 billion fiscal consumption promotion fund, will serve as the main policy supports[2]

According to the arrangements made at the State Council executive meeting on January 16, policies will focus on five key areas[1][3]:

Key Area	Specific Measures	Beneficiary Industries
Digital Service Consumption	Cloud entertainment, online education, intelligent health management	Platform economy, educational technology
Cultural and Tourism Integrated Consumption	Intangible cultural heritage experiences, rural tourism, “sports + tourism”	Tourism, hotels, performing arts
Silver Economy	Home-based elderly care, rehabilitation care, intelligent companionship	Healthcare services, elderly care industry
Green and Low-Carbon Services	New energy vehicle after-sales market, green travel	Travel services, environmental protection
International Consumption Services	Duty-free shopping, cross-border healthcare, high-end exhibitions	Retail, healthcare, tourism

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The policy shift will lead to significant valuation differentiation within the consumption sector:

:

• Tourism Services
  : Policy support rating of 95 points, expected PE valuation repair range of 30-50%
• Healthcare
  : Continuous policy support for the silver economy, valuation repair range of 25-35%
• Cultural Media
  : Rise of experiential consumption, valuation repair potential of 30-40%

:

• Automobile Consumption
  : Gradual market saturation, diminishing marginal policy effects, valuation under pressure
• Education and Training
  : Sustained regulatory pressure, limited valuation repair

Based on the industry analysis framework, the growth potential and investment value of segmented service consumption areas show the following characteristics:

Segmented Area	Growth Potential Rating	Investment Value Rating	Valuation Upside
Cultural and Tourism Integration	90	88	High
Silver Economy	88	82	High
Digital Services	85	80	Medium-High
Sports Consumption	80	75	Medium-High
International Consumption	78	70	Medium
Green and Low-Carbon	72	65	Medium

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• Expansion of Service Consumption
  : The 2026 service retail sales growth target is 7.5%, an increase of 2 percentage points from 2025[2]
• Consumption Scene Innovation
  : The 9-day Spring Festival holiday (the “longest in history”) will directly drive service consumption in tourism, catering, transportation, and accommodation[1]
• Implementation of Paid Vacation System
  : A stable and predictable vacation system will promote the shift of consumption from concentrated holidays to balanced distribution throughout the year[1]

• Reduced Financing Costs
  : The reloan for service consumption and elderly care will reduce the financial costs of service industry enterprises[3]
• Emergence of Scale Effects
  : Policy support will promote industry integration and increase the market share of leading enterprises
• Digital Transformation
  : Application of AI technology improves operational efficiency and reduces unit costs

Based on profit model calculations, the service industry has a high fixed cost structure, and revenue growth will bring greater profit elasticity:

Industry	2026 Net Profit Growth Rate (Conservative)	2026 Net Profit Growth Rate (Optimistic)
Tourism Services	25%	35%
Healthcare	15%	22%
Cultural Media	18%	28%
Home Appliance Consumption	10%	18%
Catering Services	8%	15%

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┌─────────────────────────────────────────────────────────────┐
│                Investment Ratings and Allocation Recommendations                │
├─────────────────────────────────────────────────────────────┤
│  ★★★★★ Strong Buy                                             │
│    • Tourism Services: Dual catalysis of policies + Spring Festival holiday                          │
│    • Silver Economy: Explosive demand for elderly care services                               │
├─────────────────────────────────────────────────────────────┤
│  ★★★★☆ Active Allocation                                             │
│    • Cultural Media: Rise of experiential consumption                                 │
│    • Digital Services: AI + new consumption scenarios                                  │
├─────────────────────────────────────────────────────────────┤
│  ★★★☆☆ Cautious Attention                                             │
│    • Home Appliance Consumption: Trade-in programs continue but marginal effects are declining                     │
│    • Catering Services: High recovery certainty but fierce competition                       │
├─────────────────────────────────────────────────────────────┤
│  ★★☆☆☆ Neutral                                             │
│    • Automobile Consumption: Industry enters adjustment period                                 │
│    • Education and Training: Policy uncertainty remains                               │
└─────────────────────────────────────────────────────────────┘

Industry	Leading Targets	Rationale
Tourism Services	CYTS (600138), BTG Hotels (600258)	Directly benefit from cultural and tourism integration
Healthcare Services	Aier Eye Hospital (300015), Tongce Medical (600763)	Core track of the silver economy
Cultural Media	Wanda Film (002739), Enlight Media (300251)	Upgrade of experiential consumption
Platform Economy	Meituan (3690.HK), Alibaba (9988.HK)	Carrier of digital service consumption

• Policy Implementation Risk
  : Uncertainty exists in the implementation effect of consumption promotion policies
• Macroeconomic Risk
  : Slow growth of household income may constrain consumption willingness
• Industry Competition Risk
  : Intensified competition in the service industry may compress profit margins
• Valuation Pullback Risk
  : Excessive short-term gains may trigger valuation corrections

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The shift of China’s consumption promotion policy to the service industry is an inevitable result of consumption structure upgrading and economic growth model transformation.

. It is expected that in 2026:

1. Valuation Aspect
   : Highly benefited industries such as tourism, healthcare, and cultural media will see a 15-30% valuation increase
2. Performance Aspect
   : The overall net profit growth rate of the service industry is expected to reach 15-25%, significantly outperforming goods consumption
3. Capital Aspect
   : Institutional capital will gradually shift from goods consumption to service consumption, with incremental capital continuously entering the market

: Prioritize allocation to leading service consumption enterprises with both strong policy support and solid fundamentals, focus on high-growth tracks such as the silver economy, cultural and tourism integration, and digital services, and avoid industries with high policy sensitivity and underperforming fundamentals.

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[1] 21st Century Business Herald - “State Council Executive Meeting Intensively Arranges Consumption Promotion: Service Consumption, Trade-In Programs, and Sinking Markets Become New Priorities” (https://www.21jingji.com/article/20260119/herald/72cdaacd48a7a4906fc84130329ba0ad.html)
[2] Securities Times - “Policy Support for Service Consumption Expected to Increase” (https://www.stcn.com/article/detail/3598937.html)
[3] Securities Times - “Multiple Factors Catalyze Optimism on Allocation Value of the Large Consumption Sector” (https://www.stcn.com/article/detail/3563438.html)
[4] Sina Finance - “Consumption Market Renews in the New Year, the Sector Enters a Resonance Inflection Point!” (https://finance.sina.com.cn/roll/2026-01-19/doc-inhhvsfv6920421.shtml)
[5] Wen Hui Bao - “Promote the Integrated Development of Service Industry Quality Improvement, Efficiency Enhancement, and Consumption Boosting and Expansion” (https://www.jfdaily.com/news/detail?id=1051532)