Key Takeaways:
China is pivoting its economic strategy to cultivate a 4.5 trillion yuan “emotional economy,” shifting focus from traditional heavy industry to interest-based consumer spending on pets, toys, and hobbies as a new engine for growth.
"The boom in the emotional economy is an inevitable result of the times. It reflects a deep shift in consumption logic from being ‘product-centered’ to ‘people-centered,’ with young consumers moving away from ‘practical necessities’ and toward ‘emotional satisfaction’,” said Yuan Shuai, deputy director of the investment department at the China Urban Development Research Institute.
This emerging sector is projected to more than double from an estimated 2.3 trillion yuan ($335 billion) in 2025 to over 4.5 trillion yuan by 2029, according to a report from iiMedia Research. The policy move seeks to formalize and scale hobby-related spending, which is seen as more resilient and less dependent on the debt-fueled property market that has traditionally driven consumption.
The strategic pivot is a tacit admission that the old model of stimulating demand through cars and appliances is losing steam. For investors, this shows a major shift in opportunity away from property-linked assets and toward companies that can build durable, IP-driven ecosystems around consumer attachment and recurring lifestyle purchases.
For years, Beijing’s efforts to revive spending focused on familiar big-ticket categories. Now, a recent policy plan to boost consumption is promoting “interest-based” spending, a shift from one-off transactions to repeatable, emotionally resonant purchases. Businesses that can convert affection into recurring revenue—through character IP, licensing, events, and constant product refreshes—could be better positioned than brands still relying on property-linked demand.
Pets may be one of the clearest examples, creating a long chain of spending on food, healthcare, and services. “I’ll cut back on restaurant meals before I stop buying things for my cat,” said Li Wen, a 29-year-old tech worker in Shanghai. “It doesn’t feel like splurging—it feels like making daily life a little better.” This highlights the non-discretionary nature of such spending for many, a sticky source of demand that looks far more attractive than waiting for a rebound in auto sales.
There is also a deeper strategic reason for this trend. Interest-based consumption is less dependent on debt-fueled housing wealth and fits the current policy mood: support domestic demand, encourage local brands, and cultivate new consumption categories without another old-style property stimulus. Reuters reported that officials want consumption to account for a larger share of GDP, with its contribution to economic growth set to rise steadily by 2030.
This explains why Chinese malls increasingly lean on pop-ups and themed retail to turn online enthusiasm into offline foot traffic. A successful character can sell figurines, apparel, event tickets, and co-branded goods, creating a monetizable ecosystem. The most obvious example is Pop Mart International Group, whose collectible characters helped turn emotional spending into a listed-equity story.
None of that means every hobby-linked theme is a safe bet. Emotional spending can be volatile and heavily driven by social media hype. China Daily has also included warnings from scholars that emotional value is hard to measure, creating room for impulse buying and speculative excess.
That is why investors should focus less on the hottest collectible and more on which companies can build durable ecosystems around consumer attachment. The key question isn’t whether Chinese shoppers will keep buying things that make them feel good; the evidence says they will. The question is which businesses can turn that feeling into repeat revenue. Beijing's new consumption language suggests the future will be shaped by companies that learn how to sell identity, comfort, and fun at scale.
This article is for informational purposes only and does not constitute investment advice.
