BEIJING, June 20 (Xinhua) -- China's "618" mid-year online shopping festival wrapped up this week, capping a brisk first half for the country's consumer sector, a priority on the country's economic work agenda this year.

Broader consumption data echoes the vibrant momentum: retail sales of consumer goods rose 6.4 percent in May from a year earlier, the fastest pace since December 2023 and 1.3 percentage points higher than April.

Yet, despite the upbeat numbers, the narrative around China's consumer recovery remains clouded by misconceptions over the strength, quality and global relevance of the rebound.

Is the consumption boom merely stimulus-driven? Are consumers trading down amid economic headwinds? And will the shift to the domestic market lead to less openness? The just-concluded shopping season -- alongside broader consumption trends taking shape this year -- suggests a more dynamic story behind China's evolving consumption landscape.

STIMULUS HELPS, BUT NOT THE WHOLE STORY

While government stimulus has played a role in jumpstarting demand, China's recent consumption rebound cannot be attributed to subsidies alone.

During this year's "618" shopping festival, the weeks-long campaign originally launched around June 18, sales of mobile devices and home appliances on leading e-commerce platform JD.com, both supported by the national trade-in program, surged 88 percent and 161 percent year on year, respectively.

But beyond policy-lifted spending, service consumption has become another bright spot. In the first quarter, China's services consumption expanded at a faster pace than that of goods, with retail sales of services growing 5 percent year on year.

"Service consumption is increasingly becoming a new engine driving overall consumption growth," Zou Yunhan, a researcher with the State Information Center.

Meanwhile, Chinese policymakers have gone beyond stimulus to broader policies aimed at improving people's livelihoods -- an approach increasingly seen as essential to unlocking sustainable household spending.

The government has put an unprecedented emphasis this year on demand-side support to bolster consumption through measures that foster wage increases and ease household burdens in areas such as childcare and education, which are expected to gradually reduce the need for precautionary saving and boost the willingness to spend.

In 2025, China's government spending on public well-being has been further increased, with nationwide budget allocations for education as well as social security and employment each approaching 4.5 trillion yuan (about 628 billion U.S. dollars), up by 6.1 percent and 5.9 percent, respectively.

According to a recent survey published by global consulting firm McKinsey & Company this month, China's consumer confidence has stabilized overall, with three-fourths of respondents maintaining an optimistic outlook on the economy.

"Rural consumers, for example, have shown notable improvements in confidence, supported by government policies aimed at rural revitalization and faster income growth compared to urban areas," the survey report noted.

TRADING DOWN OR TRADING SMART?

The narrative of "consumption downgrade" in China has gained traction in recent years as spending growth slowed amid economic headwinds. But the reality is far more nuanced: rather than a retreat to low-cost goods, China's consumption is undergoing a structural shift toward personal preferences, fulfillment and value-driven choices, market observers found.

Consumers are rationalizing their spending and prioritizing quality-of-life upgrades, according to McKinsey, which found that, for instance, affluent urbanites, despite declining confidence relative to other groups, plan to boost daily spending by 2.6 percent in 2025.

"These consumers are spending on tangible big-ticket items such as new homes, home renovations, and cars, while also putting more of their money toward intangible services and experiences that will give them joy and personal fulfillment," the survey said.

A report from China International Capital Corporation (CICC) this month noted a similar trend -- Chinese consumers are becoming more discerning, willing to pay for quality at a reasonable price, or justify premiums for emotional or experiential value like spending on pet care, live shows and collectible toys.

During this year's "618" shopping season, e-commerce platform Tmall reported strong triple-digit growth in overseas orders for "guzi" merchandise, a catchall term for spin-off goods tied to anime, music and gaming. Pet products also saw a spike, with 653 brands doubling their sales in the very first hour of the event.

Meanwhile, gross merchandise volume in ticketing jumped nearly 556 percent year on year, while leisure and entertainment grew by 55.4 percent and streaming by 54.84 percent, respectively, according to industry data.

MORE GLOBAL BENEFITS, NOT LESS

While China pivots toward a more consumption-driven growth model, some say that its domestic focus will lead to a retreat from global engagement, a view that overlooks the widening reach of the Chinese market across the global markets and China's determination to further open up.

As the world's second-largest importer, China boasts a vast market of 1.4 billion increasingly prosperous individuals, and the Chinese market has become a key destination for global flows of goods and services.

In 2024, China's imports expanded 2.3 percent year on year to 18.39 trillion yuan, offering much-needed stability amid subdued global growth and rising protectionism and unilateralism.

According to Tmall, overseas brands posted their strongest performance so far this year during the mid-year campaign. Fourteen overseas brands, including Australian health products brand Swisse and Japanese gaming giant Nintendo, each recorded over 100 million yuan in sales.

"China's expanding imports directly benefit other countries by creating more trade opportunities. For instance, more African products are entering the Chinese market thanks to China's favorable trade policy for the region," said Bai Ming, a researcher at the Chinese Academy of International Trade and Economic Cooperation.

In one of the latest opening-up moves, China recently announced that it is ready to negotiate and sign the agreement of China-Africa Economic Partnership for Shared Development to implement the zero-tariff treatment for 100 percent tariff lines for 53 African countries that have diplomatic relations with China.

China's efforts to boost domestic demand, with more emphasis on consumption upgrading, are not just about expanding scale, but also improving quality, Bai told Xinhua.

"As the quality of consumption rises, it will create new opportunities for imports," he said.