China’s emotional economy is on the rise
A giant inflatable Labubu toy floats on water in Victoria Harbor in Hong Kong, China, on October 25, 2025.
VCG | Visual China Group | Getty Images
Rebecca Zhou, 28, born in China’s Sichuan province, has a variety of Moomin products (bags, mugs and figurines featuring the white hippo-looking cartoon character from Finland) that she has collected over the years.
Many of these purchases may seem “childish,” as he admits, but “this [just] Even if it’s not something you’ll get your money’s worth from, it’s nice to treat yourself to something fun,” Zhou said.
Zhou is not alone. Data from analysts and official sources shows that Chinese consumers are increasingly spending more on products and experiences chosen for their emotional resonance rather than practical value, on everything from theme parks to jewelry.
But what was once a fairly unsurprising consumer impulse is now being taken seriously by China’s business leaders and policymakers.
‘Sense of connection’
China’s “emotional economy” first entered public discourse in 2024, following a frenzy. Pop-Mart‘s Labubu figurines appeared to signal shifts in Chinese consumer behavior, where a consumer group once characterized by norms of frugality and pragmatism seems equally willing to splurge on self-indulgence.
“People aren’t just buying things,” Ashley Dudarenok, founder of digital consultancy ChoZan, told CNBC in a phone interview. “They buy emotion, they buy identity, they buy the feeling of connection.”
Data from ChoZan during the recent Chinese New Year holiday shows that consumers spent significantly less on traditional staples such as festive food gifts (known as nian huo) and more on unconventional expenses such as travel experiences and cosmetics, compared to the same period in 2023.
“The things people used to buy, like booze and nuts, were all about social obligations and traditions. Now people are buying gift boxes, buying designer toys… and people don’t frown on that,” Dudarenok said.
According to Dudarenok, the shift from mandatory to more discretionary spending during China’s biggest holiday exemplifies a broader shift in consumer norms; Chinese consumers are increasingly seeking to satisfy their desire for personal satisfaction rather than making more “rational” purchases.
Beyond the Chinese New Year season, a February report DaXue Consulting also highlighted that tangible products such as aromatherapy candles and cosmetics are growing segments in China’s emotional economy.
One to guess A study from iiMedia Research Center predicts that China’s emotional economy will exceed 4.5 trillion yuan ($655 billion) by 2029 (nearly double its value in 2024) as Chinese consumers increasingly seek “emotional relief and spiritual fulfillment.”
More stressful or more relaxed?
But while many commentators note a rise in China’s emotion-driven spending, analysts are divided on what exactly is driving this growth. The most common explanations view emotion-based spending as a type of stress response.
Traditional paths to happiness in China — buying homes and cars while settling down and starting a family — “are becoming increasingly expensive to pursue,” Allison Malmsten, a strategy consultant at DaXue Consulting, said in an emailed statement.
China’s rising costs of living also coincide with record-low birth rates in 2025, contributing to a growing sense of loneliness among many in the country.
Dudarenok said these pressures have instilled a “sense of crisis” in the average Chinese consumer, prompting many to redirect their spending to “things that bring returns.” [them] joy.”
But for Bo Chen, a senior research fellow at the East Asia Institute at the National University of Singapore, this sense of melancholy is only part of the story.
According to Chen, the structural legacy of China’s One Child policy was to concentrate family resources, usually from two parents (and four grandparents), on a generation of mostly only children.
This concentration of familial wealth, sometimes called the “six-pocket” effect, has created a younger group of Chinese consumers who are financially supported by their families in ways that previous generations were not, giving them greater latitude to finance their material desires.
One 2021 surveyIn China, intergenerational income persistence (a measure of how parents’ socioeconomic well-being affects that of their children) has been found to have increased since 1979, especially among China’s urban population.
another one to work A study of homebuyers in Shanghai found that even those with significant personal savings rely heavily on parental support to finance their purchases.
Such studies confirm Chen’s claims that, on average, young Chinese consumers, one of the largest groups in China’s emotional economy, are increasingly buffered against the financial pressures of their ancestors.
“This generation doesn’t need to worry that much about their lives,” Chen said in an interview with CNBC.
Other macroeconomic trends, such as the increasing quality of goods produced by China, mean that non-discretionary items and expensive items will have longer replacement cycles for the average Chinese consumer, freeing up capital for other expenses.
With China’s booming entertainment industry, Chinese consumers also have incentives to spend on entertainment like “Ne Zha 2” It is the second film in the Chinese film series, which broke records last year after becoming the world’s highest-grossing animated film, Chen said.
Leveraging the emotional economy
What makes China’s emotional economy unique is that it is growing in an environment where consumer spending is slowing.
in 2025 Consumer spending in China It grew 2.3% from the previous year, down from 5.2% in 2024 and 9.9% in 2023.
The People’s Bank of China survey also showed that interest in big-ticket purchases fell to pre-pandemic levels in the fourth quarter of 2025, while the proportion of respondents willing to spend more on social and entertainment activities in the next three months reached an eight-year high in the same period.
In the US, where paid experiences are similarly accounted for Increasing share of consumer spendinggeneral consumption remained buoyant, It grows between 0.5% and 0.9% quarter on quarter. So, unlike China, spending on emotional economy experiences in the US is in step with, rather than against, broader consumer spending.
This difference was noticed by policymakers who wanted to stimulate consumer demand. For example, the Chongqing city government emphasized the role of the municipal emotional economy for the first time in 2026. work report.
Businesses in China have also begun to “re-evaluate their value proposition,” according to DaXue’s Malmsten, and many are exploring how they can tap into this emotion-driven spending trend.
It points to a feeling that consumers are demanding more.
“For me personally, buying these ‘childish’ items gives a comforting feeling of returning to childhood,” Zhou said. he said. “It’s a safe, nostalgic way to step back into adulthood.”
— CNBC’s Anniek Bao contributed to this report.
