Newscasts - Winter economy showcases China's hoped-for shift to services

Oversea-Chinese Banking

17/02/2026 06:01

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Source: 'Reuters - Business videos'

Description: Luo Li's ski resort north of Beijing is a rare post-pandemic success story that Chinese authorities want to replicate through state-led investments in various service sectors, in what is emerging as an important, albeit risky policy shift this year. Syakir Jasnee reports.

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Video Transcript:

When Luo Li opened the Wanlong Ski Resort in Chongli some 20 years ago, he had more staff than visitors. But things changed after China hosted the 2022 Winter Olympics. That brought new transport infrastructure to the area, about 124 miles from Beijing, and seven more ski resorts soon opened nearby. Once China lifted COVID‑19 restrictions in early 2023, the crowd started to come. Luo says Wanlong is now profitable for a second straight year and should exceed 600,000 visitors this year. Chongli's economy grew about 6.5% yearly over the past five years, beating the national average. Once a farming community, today, it bustles with tourists. That makes it a symbol for government moves to pour money into services like tourism, health, and entertainment. Beijing is redirecting stimulus from sometimes wasteful infrastructure to services in hopes of boosting growth. That comes as soft consumer demand hobbles the economy and existing measures to boost it proved ineffective. Last year's figures show that spending on services accounts for less than a half per capita consumption in China, compared to about 70% in the US. But the new approach follows the old "build it and they will come" model that created megacities like Shenzhen and big industrial zones, and that brings risks. Tommy Xie is the Head of Asia Macro Research at OCBC Bank.

Whether each time the supply can generate demand is always subject to debate because in China, there is no shortage of examples. Sometimes oversupply may potentially lead to the abandoned assets. I mean, for example, for theme parks, right? You can see a lot of provinces they built a lot of theme parks but end up with becoming the desert or becoming kind of abandoned assets.

Replicating Chongli's success hinges on raising incomes and avoiding oversupply. That is according to researcher Christopher Beddor.

You can't really get this sustained rise in household spending. It's currently at about 4% year on year growth now, incomes are growing at about 5% thereabouts. You can't really increase that figure much without increasing the household income number. So, you know, we've seen a lot of talk about efforts to lift consumption and disposable incomes, and I think we'll see a lot more of it because we have the five-year plan coming up and it's pretty clear that they're going to include something to that effect.

In recent months, Chinese state media have touted a booming ice and snow economy. It spans ski resorts, hospitality and gear, and is projected to grow to $217 billion by 2030. Making that happen will require Chinese people to have the money to spare for an often-expensive hobby.