China’s Services Spending Outpaces Goods as Travel, Entertainment Gain

China’s spending on services far outpaced purchases of physical goods in the first seven months of 2026, driven by robust demand for travel and entertainment.

The widening gap points to a structural shift in the world’s second-largest economy, as Beijing leans more heavily on services to help offset weak demand for traditional merchandise.

Service retail sales rose 5% year on year from January through July, compared with a 1.1% increase in retail sales of physical goods, according to the National Bureau of Statistics. Overall retail sales of consumer goods rose 1.2% to 28.77 trillion yuan ($4.3 trillion).