BEIJING, Aug. 4 (Xinhua) -- At a bustling appliance store near Shanghai's Zhongshan Park, sales staff enthusiastically demonstrated product features and calculated discounts. The summer shopping season has been in full swing.

A local resident surnamed Yao was looking for an energy-efficient air conditioner, who was informed by sales staff that the latest models not only offer AI-powered energy savings but also include convenient features such as smartphone remote control and an anti-direct-blow design.

"I never realized how quickly home appliances were evolving until I visited the store," Yao said. After careful comparison, he chose a model originally priced at 5,999 yuan (about 840 U.S. dollars), but thanks to government subsidies and store discounts, he paid only 3,599 yuan.

Yao is among hundreds of millions of consumers across China whose spending habits have been reshaped by a rapidly evolving market and government-backed initiatives, as the world's second-largest economy seeks to stimulate consumption and strengthen domestic demand as a key growth driver.

With efforts like the ongoing consumer goods trade-in program, which spurred purchases of more than 109 million home appliances so far this year, China recorded a 5 percent growth in retail sales of consumer goods for the first half of 2025. The pace is 0.4 percentage points faster than the first quarter.

During the first four years of the 14th Five-Year Plan period (2021-2025), final consumption contributed 56.2 percent of the GDP increase on average, an 8.6 percentage point increase over the previous planning period, official data showed.

Amid this shift, new consumption trends have taken center stage, fueled by innovative business models, diverse service and experience offerings, and growing preference for sustainable and high-tech products.

According to China's commerce minister Wang Wentao, the consumer goods trade-in program has been "more than a policy to stimulate spending."

"More importantly, it has promoted a shift toward smart and green products, which in turn helps to upgrade people's quality of life," he told the press last month while briefing on the country's developments in domestic consumption over the past four years.

While government incentives can boost market demand and prompt manufacturers and service providers to increase supply, encouraging consumption in sectors like high-tech and new energy helps drive industrial upgrading and structural adjustments, said Bao Xiaohua, a chair professor at Shanghai University of Finance and Economics.

Also notable is the rapid growth in service consumption, as Chinese consumers increasingly embrace spending on services and experiences. From 2020 to 2024, China's service consumption grew at an average annual rate of 9.6 percent.

In the first half of 2025, data from the State Information Center indicated that the index measuring life service consumption increased 15.7 percent year on year, with sectors like entertainment, dining and accommodations showing robust growth.

Driving the service consumption boom are new consumption scenarios such as sporting events, performances, cultural exhibitions and themed markets. The Su Super League, a provincial amateur football tournament in east China's Jiangsu Province that gained huge popularity this year, has given a major boost to local tourism and hospitality industries.

During the third round of matches, which coincided with the Dragon Boat Festival holiday in early June, Jiangsu welcomed 12.41 million visitors and earned 4.69 billion yuan in tourism revenues.

Other pro-consumption efforts include further opening up to attract more quality goods and services into the Chinese market. Over the past years, China has fostered international consumption center cities, established national demonstration zones for innovation and promotion of imports, and hosted major events such as the China International Import Expo and the China International Consumer Products Expo.

"China's vast market has become a shared market for the world and will continue to serve as a key source of growth and vitality for the global economy," the commerce minister said.

Looking ahead, as China approaches the final phase of its 14th Five-Year Plan, market observers believe consumer demand will sustain its strong momentum from the first half and help ensure the plan's successful completion.

Policies like the consumer goods trade-in program are expected to remain effective, driving sales growth for related products. Meanwhile, with holidays like summer vacation and the upcoming National Day, service consumption is also set to enter its peak season, according to experts.

Ma Hong, a senior researcher at the Guangkai Chief Industry Research Institute, said service spending will remain a key driver of consumption growth in the second half of the year. "Further opening up of the sector, coupled with innovations in consumption scenarios, will boost service consumption in areas like telecommunications, healthcare and elderly care," he added.

In one of the latest announcements, 69 billion yuan, in China's third batch of ultra-long special treasury bond funds, was allocated last month to support the consumer goods trade-in program, with the fourth batch scheduled for October.

The country also introduced a nationwide childcare subsidy program last week, which will offer families 3,600 yuan per year for each child under the age of three, as part of broader efforts to address livelihood problems and boost consumer confidence.

"More funds and resources will be invested in people and used to meet their needs" to help create more jobs, increase people's incomes and reduce their burdens, and provide more incentives to stimulate consumption, this year's government report has pledged.

For the next five years, Minister Wang Wentao said China will transform successful policies and effective practices from the 14th Five-Year Plan into long-term, regular measures, while staying ready to introduce new policies to navigate a complex international environment. "Our toolkit is well-stocked, and we will be fully prepared."