Services Sector Moves Up China's Policy Agenda
Reading Xi's directive on the services sector and what the State Council's 100-trillion-yuan goal really signals
Yesterday, the State Council issued the Opinion on Promoting Capacity Expansion and Quality Upgrading of the Services Sector国务院关于推进服务业扩能提质的意见. This follows President Xi Jinping’s directive on services sector development in early April, and in my view marks a further elevation of the services sector’s importance within China’s economic policy agenda.
1. The High-Level Configuration of the National Services Sector Conference
The background to Xi’s directive was the National Services Sector Conference held on April 7–8. The seniority of the attendees alone signals the weight Beijing is placing on the sector: following Xi’s directive, Premier Li Qiang attended and delivered a speech, while Vice Premier Ding Xuexiang gave the concluding remarks. The combination of “General Secretary’s directive + Premier’s speech + Vice Premier’s summary” represents a relatively high-level configuration for a specialized economic conference. It’s an especially high one when applied to a specific sector like services.
2. Xi Jinping’s Directive on the Services Sector
Xi first framed the role of the services sector:
“It has played an important role in supporting industrial upgrading, meeting the needs of people’s livelihoods, and driving employment expansion.”
In a sense, the ordering of these three functions may reflect their respective weight in the leadership’s thinking. This is consistent with the priority structure embedded in the recent official narrative around the “modernized industrial system”
On the direction of services sector development, Xi stated:
“Highlight demand-driven growth, reform breakthroughs, technological empowerment, and opening-up and cooperation; deeply implement the services sector capacity-expansion and quality-upgrading initiative; advance producer services toward specialization and the high end of the value chain; promote high-quality, diversified, and convenient development of consumer services; and cultivate more ‘China Services’ brands.”
What stands out here is that “China Services” is singled out as a branding concept. This, in a sense, suggests that its importance has been elevated to a level comparable to that of “Made in China” (I avoid the word “equal”, cause from a first-principles standpoint, manufacturing remains the top priority within all industrial sectors). This formulation is reiterated in the State Council’s document and echoes the quantitative target of “pushing the total scale of the services sector above the 100-trillion-yuan threshold by 2030.”
3. Li Qiang’s Speech: Strategic Positioning and “Balancing Openness with Regulation”
Li Qiang followed with a speech calling for the need to “consciously deepen our understanding of the services sector from a strategic and holistic perspective” — a phrasing that in itself reaffirms the policy standing now accorded to the sector.
In terms of wording, Li Qiang’s emphasis centered on “capacity expansion and quality upgrading.” It’s a distinctly supply-side orientation, indicating that policy is focused primarily on the industry itself rather than on stimulating demand.
Also worth noting are several parallel formulations that immediately follow:
“Coordinate development and regulation… ensuring that the sector is both vibrant and healthily ordered.”
And later, this is reiterated as:
“Adhere to both ‘letting it flow freely’ and ‘governing it well.’”
The repetition of these paired phrases emphasizes that as the services sector is “opened up,” regulation must keep pace. This reflects a cautious attitude toward the potential risks that may accompany the services sector’s development.
4. The State Council’s Opinion
The Opinion on Promoting Capacity Expansion and Quality Upgrading of the Services Sector issued yesterday carries forward this supply-side approach. It sets the target of pushing the total scale of the services sector above 100 trillion yuan by 2030, meaning that services sector policy during the 15th Five-Year Plan period will have explicit quantitative benchmarks, making assessment and evaluation more operational.
The Opinion divides the services sector into producer services and consumer services.
Producer services (six sub-items) cover: technology services, modern logistics, software and information services, supply-chain finance, energy conservation and environmental protection, and business services. The emphasis here is on “shoring up weak links,” with the phrase “extending toward specialization and the high end of the value chain” appearing repeatedly. In my view, this targets the sector’s supporting role for manufacturing and the broader modernized industrial system.
Consumer services (four sub-items) cover: household services, elderly care and childcare, health, and culture/tourism/sports. The emphasis here is on “increasing high-quality supply,” corresponding to Xi’s call for development that is “high-quality, diversified, and convenient.”
An interesting feature appears in Part V (”Improving the Supporting Policy System”), where the first and last provisions form a closed loop. The first provision calls for clearing out unreasonable standards and restrictive measures in the services sector, corresponding to “letting it flow freely.”
While the final provision specifically addresses unfair contract terms (”overlord clauses”), false advertising, food safety, and the rights of workers in new forms of employment, corresponding to “governing it well.” And I think the final one is primarily a response to recent public concerns surrounding the platform economy and sectors such as food and beverage services, and it basically translates Li Qiang’s “letting it flow freely, governing it well”(放得活，管得好) principle.
Below is the full translation of the document I made with the help of AI
State Council Opinion on Promoting Capacity Expansion and Quality Upgrading of the Services Sector
To: The People’s Governments of all provinces, autonomous regions, and municipalities directly under the Central Government; all ministries and commissions of the State Council; and all directly subordinate agencies:
In order to promote capacity expansion and quality upgrading of the services sector, to foster the high-quality and efficient development of the sector, and to better bring into play the role of services in supporting industrial upgrading, meeting the needs of people’s livelihoods, and driving employment expansion, the following Opinion is hereby issued.
I. Overall Requirements
Guided by Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, thoroughly implementing the spirit of the 20th Party Congress and of all plenary sessions of the 20th Central Committee, earnestly carrying out the arrangements of the Fourth Plenary Session, fully and faithfully applying the new development philosophy in all respects, upholding the integration of an effective market and a capable government, pursuing capacity expansion and quality upgrading in parallel, coordinating development with regulation, and highlighting demand-pull, reform breakthroughs, technological empowerment, and opening-up and cooperation — we will coordinate the optimization of new increments with the revitalization of existing stock, deeply implement the services-sector capacity-expansion and quality-upgrading initiative, remove the institutional and mechanism-related barriers constraining services-sector development, advance producer services toward specialization and the high end of the value chain, promote the high-quality, diversified, and convenient development of consumer services, and provide robust support for accelerating the building of a modernized industrial system.
By 2030, notable progress shall be achieved in the high-quality development of the services sector: the total scale of the services sector shall climb past the 100-trillion-yuan threshold; a development pattern featuring higher quality, a better structure, finer grade, and greater vitality shall have taken basic shape; more “China Services” brands shall be cultivated; the global competitiveness and influence of China’s services sector shall be markedly enhanced; and the people’s sense of gain shall continue to grow.
II. Shoring Up Weak Links in Producer Services Across the Full Chain
(1) Strengthening the Supporting Role of Science and Technology Services
R&D and design. Cultivate leading industrial-design enterprises and raise their professional and international standing. Enhance the service capacity of the national network management platform for major research infrastructure and large-scale scientific instruments, and improve the evaluation and assessment mechanisms for open sharing of research facilities and instruments. Upgrade full-process services such as engineering survey, design, and supervision.
Intellectual property. Develop IP-related services such as strategic consulting and patent navigation, and screen for high-value patents. Support the establishment of patent pools in key industries, systematically raise IP service standards, and strengthen the capacity to respond to foreign-related IP risks and provide legal services. Strengthen the international-operations capacity of copyright services.
Transformation of scientific and technological achievements. Enhance policy support for the high-quality development of incubators, and set up incubators oriented toward emerging industries and industries of the future. Build a pilot-scale service network for the manufacturing sector, cultivate manufacturing pilot-testing platforms in a tiered fashion, and develop, to a high standard, the National Pilot Base for Artificial Intelligence Applications. Improve the network of technology-trading service platforms, and build high-caliber technology-transfer and dissemination institutions. Establish regional technology-transfer and commercialization centers at universities, and promote the clustering of scientific and technological innovation factors.
Inspection, testing, and certification. Benchmarking against world-class standards, upgrade inspection and testing service capabilities and push for international mutual recognition of results. Advance the construction of laboratories for industrial-product quality control and technical evaluation, quality inspection and testing centers, and industrial metrology and testing centers. Strengthen testing and assessment capabilities for infrastructure conditions, agricultural-product quality, and the like. Strengthen R&D on high-end metrological instruments and inspection and testing equipment.
(2) Enhancing the Comprehensive Competitiveness of Modern Logistics
Freight transport. Improve the multimodal-transport system and promote the implementation of “one-document” and “one-container” systems. Vigorously develop rail-water intermodal transport, and accelerate the shift of bulk cargo and medium-to-long-distance freight “from road to rail” and “from road to water.” Accelerate the transition of rail freight toward rail logistics, and refine industry rules on railway dispatching, clearing, and line connection. Improve the operations and dispatching mechanisms for oil and gas pipeline networks, and accelerate nationwide interconnection. Vigorously develop international shipping and air-freight services. Accelerate the cultivation of integrated logistics integrators, and strengthen resource dispatching and supply-demand matching.
Warehousing. Advance the renewal, renovation, and upgrading of aging logistics and warehousing facilities; explore the reactivation of idle facilities and rail-freight yards; and promote the construction of distributed warehousing facilities. Strengthen services such as origin-based cold storage and preservation, post-harvest pre-cooling, and cleaning and packaging for agricultural products. Coordinate the layout of public, circulation-oriented, and multifunctional cold storage, and upgrade aging cold-storage facilities.
Wholesaling. Guide the rational layout of spot markets for bulk commodities, and promote linked development between futures and spot markets. Enrich the business formats of industrial consumer-goods markets, and explore integrated services such as centralized procurement and warehousing-distribution. Strengthen the systematic layout and policy support for agricultural wholesale markets, and promote the renovation and upgrading of farmers’ markets.
(3) Accelerating the Innovative Development of Software and Information Services
Software. Deeply implement the “AI Plus” initiative, accelerate R&D and adoption of intelligent programming tools, and support procurement of large-model and intelligent-agent services. Accelerate breakthroughs in industrial software, and build compatibility-adaptation and application-demonstration centers for industrial software in key industries. Strengthen the ecosystem of foundational software and open-source communities. Optimize the ecosystem for intelligent audio-visual systems.
Information transmission. Deeply advance the large-scale application of 5G. Promote the development of 5G-A networks, and strengthen R&D on 6G technology. Build mobile IoT infrastructure with appropriate forward-looking deployment. Develop satellite-internet application services.
Data and information technology. Deeply implement the Industrial Internet Innovation and Development Program. Advance the initiative to lay the foundation for industrial data, cultivate data cooperation consortia, and build a number of high-quality industry datasets. Develop specialized services such as data labeling and certification, and explore the establishment of a tiered and classified mechanism for data rights confirmation, valuation, and pricing. Advance, in an orderly manner, the layout of computing power and the construction of edge computing, and improve the intelligent-computing cloud-service system. Accelerate the adoption of City Information Modeling (CIM) platforms and Building Information Modeling (BIM) technology.
(4) Strengthening the Specialized Service Capacity of Supply-Chain Finance
Banking, securities, and insurance. Guide financial institutions — on the premise of lawful compliance and controllable risks — to provide financing secured by movable assets and rights such as inventory, orders, and warehouse receipts. Establish a full-lifecycle financing system oriented toward investing early, investing small, investing long-term, and investing in hard tech. Give full play to the role of the National Venture Capital Guidance Fund, and refine and extend the “Innovation Points System” and the evaluation system for “Little Giant” (SRDI) development of SMEs. Promote new financial-service instruments such as supply-chain bills. Expand the coverage of product-R&D liability insurance, promote insurance for pilot-testing services, and implement the insurance-compensation policy for “first-unit-set” products. Launch the Digital RMB Empowerment Initiative. Explore mutual recognition of cross-border supply-chain-finance standards.
Financial leasing. Encourage financial-leasing enterprises to make coordinated use of service models such as direct leasing, sale-and-leaseback, and joint leasing, to provide customized solutions and reduce lessees’ operating costs. Strengthen monitoring and assessment of lessees’ credit status and repayment capacity, and build a sound valuation system for leased assets. Give full play to the role of government-backed financing guarantee institutions, and establish a risk-sharing mechanism for supply-chain finance.
(5) Actively Developing Energy-Conservation and Environmental Services
Energy conservation and carbon reduction. Advance energy-efficiency diagnostics in key industries, promote the energy-cost-hosting service model for public institutions, and carry out energy-saving and carbon-reduction retrofits for public institutions and large public buildings. Lawfully and prudently conduct financing secured by carbon-emission rights, pollution-discharge rights, water-use rights, and the like. Encourage financial institutions to participate in carbon-market trading, explore carbon-insurance business, and promote innovative products such as carbon-neutrality bonds.
Environmental governance. Develop technical services for green, high-yield, and efficient agriculture, and for the treatment and utilization of agricultural waste. Accelerate the development of environmental services such as marine ecological restoration and pollution control. Expand services such as water-conservation assessment, environmental monitoring, and pollution insurance.
Recycling and reuse. Advocate the concept of green economy and thrift, encourage the adoption of products with higher energy-efficiency grades, and phase out — in accordance with laws and regulations — products that meet the mandatory scrapping standards or fail to comply with safety technical specifications. Improve the layout of recyclable-resource collection networks, strengthen the “trade-in + recycling” logistics system, and coordinate the construction of recyclable-resource sorting centers. Support remanufacturing services in key industries. Establish a certification system for recycled materials, and promote international cooperation and mutual recognition. Deepen research on carbon-footprint accounting standards and methodologies for key recycled materials.
(6) Making Business Services Stronger and Better
Legal and consulting services. Actively develop foreign-related legal services, and cultivate a group of world-class arbitration institutions and law firms. Vigorously develop professional services such as business consulting, asset appraisal, accounting and auditing, taxation, and advertising, and enhance capacity in quality consulting and supply-chain management services. Strengthen industry think tanks, and build world-class consulting brands.
Human-resources management. Release catalogs of demand for “high-end, cutting-edge, and scarce” talent, and continue to implement the Knowledge-Updating Program for Professional and Technical Personnel. Improve the vocational skills competition system with Chinese characteristics. Develop service products such as job-search-and-recruitment large models and VR-based training. Deeply advance the “Belt and Road” Human-Resources Services Initiative.
III. Raising the Development Level of Key Areas of Consumer Services
(7) Increasing High-Quality Supply of Household Services
Community and domestic services. Innovate integrated community-service models, and advance the expansion, upgrading, and efficiency enhancement of “complete communities.” Carry out an initiative to raise the quality of property-management services. Pursue institutional and model innovation in domestic services, expand new types of at-home services, improve the caliber and professional standards of practitioners, and enhance the public’s micro-level experience. Focus on meeting the special-care needs of disadvantaged groups.
Retail. Promote rational urban-rural planning and layout of the retail sector, implement the Retail Innovation and Upgrading Program, and support eligible cities to craft new consumption settings on a “tailored, store-by-store” basis. Encourage the development of instant-delivery formats such as community micro-cold-storage and forward-positioned warehouses. Implement the High-Quality Rural E-commerce Development Program, and advance the “Thousand-Market, Ten-Thousand-Store” upgrading initiative.
(8) Improving the Fit of Elderly-Care and Childcare Services
Elderly care. Strengthen the three-tier county-township-village elderly-care service network, expand the coverage of community-based elderly-care services, and encourage home-based aging-friendly renovations. Expand the supply of services such as rehabilitation and nursing care, integrated medical and elderly care, and long-term care, and develop new service formats such as travel-based retirement living.
Infant and childcare. Develop inclusive childcare and integrated childcare-and-preschool services, deeply carry out demonstration pilots for childcare-service subsidies, and support child-welfare institutions in providing care, rehabilitation, and special education services for children with disabilities in need.
(9) Enhancing the Professional Capacity of Health Services
Medical and health services. Support medical and health institutions in carrying out personalized family-doctor contracting services, providing health assessments, chronic-disease management, home visits, and medication guidance. Prudently advance pilots for international medical services.
Prevention and health care. Develop women’s preventive health care and integrated medical-care services, and improve the health-service network for children and the elderly. Strengthen the construction of a socialized service system for mental health and psychiatric wellness. Accelerate the development of services such as sports-data analytics and nutritional consulting.
(10) Innovating Service Models for Culture, Tourism, and Sports
Culture and tourism. Guide the healthy and orderly development of performing arts and entertainment, gaming and animation, online literature, and similar formats, and promote positive values. Encourage popular scenic spots and cultural and museum venues to extend opening hours. Improve public facilities at scenic areas, revitalize existing tourism projects, strengthen refined management, and optimize service supply.
Sports and fitness. Widely carry out nationwide fitness activities to strengthen the people’s physical health. Advance the high-quality development of the sports-events economy and the ice-and-snow economy, cultivate new formats such as RV camping, and build high-quality outdoor-sports destinations. Nurture new sports-consumption models that are intelligent, customized, and experience-based.
Accommodation and catering. In response to the upgrading of public needs — from “having a place to stay” to “staying well and staying worthwhile” — raise safety and hygiene standards, expand new service models, and develop new accommodation formats incorporating historical-cultural, technological, and family-oriented elements. Cultivate catering services that are healthy, safe, nutritionally balanced, and reflective of local character, and release curated gourmet-tourism routes.
IV. Raising the Digital-Intelligent, Standardization, Integration, and Internationalization Levels of the Services Sector
(11) Advancing the Digital-Intelligent Transformation of the Services Sector
Focusing on key segments such as R&D and design, inspection and testing, logistics and distribution, wholesale trade, and consulting services, build vertical industrial-internet platforms and lower the threshold for digital-intelligent transformation through “small, fast, light, and precise” solutions. Implement a special initiative to accelerate the development of digital-intelligent supply chains, and advance the digital-intelligence empowerment program for commercial and trade logistics. With data as the enabler, implement comprehensive major-scenario and high-value application-scenario projects, cultivate digital-intelligent transformation service providers, and build benchmark applications integrating data, algorithms, and scenarios.
(12) Accelerating Standardization in the Services Sector
Strengthen top-level design and improve the standards system for key areas. Refine standards and norms for domestic services, caregiving, catering, and related fields. Accelerate the formulation of service standards for emerging and integrated formats such as low-altitude services and socialized agricultural services. Build a standards system and interconnection technical specifications for industrial-internet platforms, establish a standards system for computing-power services, and formulate or revise green-service standards. Improve service standards for the platform economy. Promote the establishment of international industry and standards organizations, and advance the “going global” of Chinese standards.
(13) Raising the Level of Integrated Development Between Modern Services, Advanced Manufacturing, and Modern Agriculture
Deepen pilots on the integration of advanced manufacturing and modern services in key areas. Innovate the development of service-oriented manufacturing, and push manufacturing enterprises to transform into providers of “product + service” solutions. Improve the convenient and efficient socialized-services system for agriculture, and optimize the functions of agricultural-product market-information service platforms. Actively promote the deep integration of agriculture with health care, cultural tourism, and the like.
(14) Steadily Advancing Opening-Up and Cooperation in the Services Sector
Further expand opening-up pilots in fields such as value-added telecommunications, biotechnology, and wholly foreign-owned hospitals. Refine the negative-list management system for cross-border trade in services. Enhance service capabilities for cross-border data-transfer compliance assessment and security certification. Strengthen services-trade cooperation with key countries and regions, and coordinate the layout and construction of major opening-up and cooperation platforms such as Pilot Zones for Innovative Development of Trade in Services. Promote the export of cultural and tourism services, and expand inbound consumption.
V. Improving the Supporting Policy System
(15) Deepening Reform and Innovation
Adhere to both “letting it flow freely” and “governing it well.” Clear out unreasonable standards and restrictive measures in the services sector, and promptly eliminate barriers in areas such as factor access, qualification recognition, tendering and bidding, and government procurement. Deepen the reform of public-service institutions in service-related fields, and enhance their development vitality. Optimize the market-access environment in areas such as medical care and technological innovation. Enrich the supply of service scenarios, and roll out lists of application-scenario projects in batches. Improve the statistical system, build a multi-dimensional comprehensive evaluation-indicator system for services-sector development, and accelerate big-data-based oversight.
(16) Enriching Fiscal and Financial Policy Instruments
Enhance the targeting and effectiveness of policy support, and improve a financing credit-enhancement system covering elements such as quality, standards, brands, trademarks, patents, and copyrights. Make good use of the relending facilities for service consumption and elderly care. Enrich the development of pension-finance products, and roll out long-term care insurance. Optimize the implementation of loan-interest-subsidy policies for services-sector business entities; provide phased interest subsidies for qualifying loans to small, medium, and micro private producer-services enterprises; and step up financial support for new consumption scenarios. Use existing national-level government investment funds to support integrated development of advanced manufacturing and modern services. Support eligible projects in the services sector in issuing infrastructure Real Estate Investment Trusts (REITs).
(17) Strengthening the Supporting Role of Infrastructure
Revitalize and make good use of various types of existing stock resources. Accelerate the construction of urban parking and charging/battery-swapping facilities, and advance the upgrading of aging equipment. Strengthen the construction of modern integrated agricultural-service centers. Lay out and build integrated, efficient quality infrastructure, and step up support for investment in intangible assets such as software, R&D, and data. Systematically advance the construction and functional upgrading of national logistics hubs, and optimize the layout of overseas warehouses. Push forward the expansion and upgrading of “15-minute community convenience living circles.” Promote the renewal of commodity-trading markets, urban retail outlets, and rural commercial outlets. Renovate aging neighborhoods and industrial areas, and support the upgrading of commercial districts, cultural-industry parks, and similar formats.
(18) Expanding High-Quality Business Entities in the Services Sector
Accelerate the cultivation of backbone services enterprises, and support eligible ones in IPO financing and in M&A and restructuring. Promote the specialized and “Little Giant” (SRDI) development of SMEs in the services sector, and step up the cultivation of “famous, special, high-quality, and new” self-employed businesses. Cultivate and strengthen socialized-service providers in agriculture. Strengthen the consolidation of industry credit information, encourage business entities to make service-quality commitments, and advocate for “higher quality at higher value.” Support enterprises in strengthening brand-building and communications, and cultivate new brand-experience scenarios.
(19) Strengthening Talent Development
Optimize the disciplinary and specialty layout related to the services sector, and support qualified localities in building city-level industry-education consortia and industry-wide industry-education integration communities. Deeply implement the “Skills Illuminate the Future” training initiative, focusing on industries in urgent need and key employment groups, to carry out large-scale vocational-skills training. Broaden the scope of specialized-talent recruitment, and advance the construction of one-stop service platforms for overseas talent.
(20) Strengthening Safety Regulation
Improve cross-departmental and cross-industry approval and regulatory models suited to the integration of business formats, so as to avoid gaps in management and services. Improve the safety-management system for crowded venues such as performance sites, sports-event venues, exhibition halls, and tourist attractions, and implement responsibility for workplace safety. Regulate catering-service operations, and strictly uphold the bottom line on food safety. Resolutely address misconduct such as “overlord clauses” (unfair contract terms) and false advertising, and effectively safeguard consumer rights. Strengthen the protection of the rights and interests of workers in new forms of employment.
All regions and departments shall, under the centralized and unified leadership of the Party Central Committee, implement this Opinion in light of actual conditions, and strive to open up a new chapter in the high-quality development of the services sector. The government performance-evaluation system shall be further improved to fully mobilize the enthusiasm and initiative of all parties. All regions, grounded in their development stage and comparative advantages, shall implement the tasks and measures in a detailed, locally tailored manner. The National Development and Reform Commission shall strengthen overall coordination, monitoring, and evaluation. All departments shall advance work by sector according to their respective responsibilities, strengthen work coordination, enhance publicity and guidance, broadly build social consensus, and foster a favorable atmosphere of whole-of-society participation. Major matters shall be reported in a timely manner to the Party Central Committee and the State Council in accordance with due procedures.
The State Council
April 14, 2026