SCIO briefing on China's economic performance in July 2026

National Business Daily:

We noticed that total retail sales of consumer goods and services increased 2.6% year on year from January to July, indicating a steady recovery in the consumer market. How would you assess consumption in July? How did summer vacation consumption, cultural and tourism consumption, and online retail sales of goods and services perform? What are the favorable conditions and the challenges facing the development of the consumer market moving forward? Thank you.

Fu Linghui:

I would like to invite Ms. Wang to answer your questions.

Wang Guanhua:

Thank you for your questions. From January to July, China's retail market expanded steadily, with total retail sales of consumer goods and services rising 2.6% year on year, a relatively stable growth rate compared to the first half of the year. Alongside this expansion, the consumer market also showed several structural features.

First, there is a clear trend of household consumption shifting toward services. In July, frequent extreme weather events such as typhoons, rainstorms and high temperatures affected offline consumption in some areas. Growth in transportation services, for example, slowed. Overall, however, service consumption has shown strong stability in recent years, with its growth rate consistently outpacing that of goods consumption. From January to July, retail sales of services grew by 5%, 3.9 percentage points faster than retail sales of goods, indicating a shift in consumer focus from "buying goods" to "enjoying services" and "valuing experiences." July marked the start of the summer holiday season, and many localities launched special cultural and tourism activities and measures to benefit consumers. Demand for immersive and experiential consumption such as night markets, parent-child study trips and summer getaways continued to grow. From January to July, retail sales of tourism consulting and leasing services and of cultural, sports and recreational services increased 11% and 10.1% year on year, respectively, both maintaining double-digit growth. Digital consumption scenarios continued to expand, and the supply of digital content such as e-reading and online audio-visual programming grew, driving an 11.9% increase in retail sales of communication and information services. Services are consumed frequently, with transportation, communication and daily life services all part of routine daily spending. Service consumption also has a strong spillover effect. Each cultural or tourism trip, for example, generates revenue not only for tourist attractions but also for surrounding catering, accommodation and transportation businesses. Expanding service consumption will therefore continue to be a main engine of overall consumption growth.

Second, goods consumption is improving in quality, with green and intelligent products becoming increasingly popular. From January to July, China's retail sales of goods exceeded 25 trillion yuan, up 1.1% year on year. Basic living goods such as grain, oil, food and beverages saw steady growth, while retail sales of upgraded goods such as cosmetics and communication equipment grew rapidly. Driven by policies such as the consumer goods trade-in program, durable consumer goods are becoming smarter and greener, with new energy vehicles, energy-saving appliances and smart home products gaining increasing favor among consumers. From January to July, retail sales of smart wearable devices, including smart glasses, more than doubled year on year, and retail sales of high-efficiency home appliances by enterprises above the designated size grew more than 30%.

Third, new forms of consumption continue to show vitality. Online platforms, with their wide choice, convenience and efficiency, have become a major channel for daily consumption. From January to July, online retail sales of goods and services increased by 4.8% year on year, with online retail sales of goods accounting for nearly 30% of total retail sales of goods. New retail formats catering to quality consumption and digital convenience have grown rapidly. Retail sales at warehouse membership stores above the designated size and unmanned stores both increased more than 25%, and sales at shopping malls posted double-digit growth.

Fourth, rural and inbound consumption continue to release potential. As rural commerce and logistics systems improve, rural spending power is being further tapped. From January to July, retail sales of consumer goods in rural areas increased by 2.4% year on year, 1.3 percentage points higher than in urban areas. Policies to facilitate cross-border travel have also continued to improve. Version 2.0 of the departure tax refund policy took effect on July 1, further boosting overseas visitors' spending on shopping, sightseeing and quality goods in China. In July, sales of tax-refundable goods to visitors rose sharply in many places, and traffic from "China Travel" is increasingly being converted into sales under "China Shopping."

China has a large population and a continuously growing middle-income group, and the demand for high-quality, personalized and experience-based consumption is rising. Technological innovation keeps giving rise to new products and new business models, leaving considerable room for the consumer market to expand. At the same time, we should also recognize that the supply of some high-quality goods and services has yet to keep pace with changing consumer demand, and household spending capacity and willingness need to be further boosted. A comprehensive approach is therefore needed, with concerted efforts to raise household incomes, improve market supply and strengthen consumer confidence, so as to continuously unleash consumption potential. Thank you.