A giant inflatable Labubu toy floats on the water at Victoria Harbour on October 25, 2025 in Hong Kong, China.
Vcg | Visual China Group | Getty Images
28-year-old Rebecca Zhou, born in China’s Sichuan province, owns an assortment of Moomin merchandise — bags, mugs, and figurines featuring the white hippo-looking cartoon character from Finland — that she has accumulated over the years.
By her own admission, many of these purchases may seem “childish”, but “it is [just] nice to treat yourself to something fun, even if it is not the most value-for-money,” Zhou said.
Zhou is not alone. Data from analysts and official sources show that Chinese consumers are increasingly spending on goods and experiences chosen for their emotional resonance over practical value — everything from theme parks to jewelry.
But what may once have been a fairly unsurprising consumer impulse is now being taken seriously by China’s business leaders and policymakers.
‘A sense of connection’
China’s “emotional economy” first entered into public discourse in 2024, after a craze over 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 appeared just as willing to splurge on self-indulgence.
“People are not just buying things,” said Ashley Dudarenok, founder of digital consultancy ChoZan told CNBC in a phone call. “They’re buying feelings, they’re buying identity, they’re buying a sense of connection.”
Over the recent Chinese New Year holiday, data from ChoZan shows that consumers spent significantly less on traditional staples like festive food gifts (known as nian huo), and more on unconventional expenses, like travel experiences and cosmetics compared to the same period in 2023.
“What people used to buy back in the day, like liquor and bulk nuts … were all about social obligations and tradition. Right now, people buy gift boxes, they buy designer toys … and people don’t frown upon that,” Dudarenok said.
This shift from obligatory to more discretionary spending over China’s largest holiday exemplified broader shifts in consumer norms, according to Dudarenok, with Chinese consumers increasingly looking to satisfy desires for personal fulfillment, over more “rational” purchases.
Beyond the Chinese New Year season, a February report from DaXue Consulting also highlighted tangible goods like aromatherapy candles and cosmetics, as growing segments in China’s emotional economy.
One estimate from the iiMedia Research Center projected China’s emotional economy to exceed a valuation of 4.5 trillion yuan ($655 billion) by 2029 — almost double its value in 2024 — as Chinese consumers seek ever-increasing “emotional relief and spiritual satisfaction”.
More stressed or just more comfortable?
But while many commentators have noted a growth in China’s emotion-driven spending, analysts are divided on what exactly is fueling this growth. The most common explanations see emotion-driven spending as a sort of stress response.
Traditional paths to happiness in China — buying a house and car, all while settling down and starting a family — have “grown increasingly expensive to follow,” Allison Malmsten, strategy consultant from DaXue Consulting, said by email.
In step with China’s ailing housing market — predicted to worsen in 2026, consumer inflation has also risen to a three-year high in February, according to China’s National Bureau of Statistics.
China’s rising costs of living have also dovetailed with record low birth rates in 2025, adding to a growing sense of loneliness among many in the country.
Compounded, these pressures have instilled in the average Chinese consumer “a sense of crisis,” Dudarenok said, pushing many to redirect spending toward things that “bring [them] joy.”
But for Bo Chen, senior research fellow from the National University of Singapore’s East Asian Institute, this sense of melancholy forms only part of the story.
For Chen, the structural legacy of China’s One-Child policy often concentrated familial resources from two parents (and four grandparents) on a generation of mostly single children.
This concentration of familial wealth — sometimes termed the “six pockets” effect — produced a younger cohort of Chinese consumers materially cushioned by their families in ways that previous generations were not, which gave them greater latitude to finance their material desires.
In a 2021 study, intergenerational income persistence — a measure of how the socioeconomic well-being of parents influenced those of their children — in China was found to have increased since 1979, particularly among China’s urban population.
Another study on homebuyers in Shanghai found that even those with considerable personal savings relied heavily on parental support to fund their purchases.
Such studies lend credence to Chen’s claims that, on average, younger Chinese consumers — one of the largest groups in China’s emotional economy — are increasingly buffered from the financial pressures of their forebears.
“This generation … they don’t need to worry about their lives that much,” Chen said in a call with CNBC.
Other macroeconomic trends, like the increased quality of China’s manufactured goods, has meant that nondiscretionary products and big-ticket items have longer replacement cycles for the average Chinese consumer, freeing up capital for other expenses.
With China’s thriving entertainment sector, Chinese consumers also have incentives to spend on entertainment like “Ne Zha 2” — the second installment of a Chinese movie franchise which broke records last year after coming in as the world’s highest-grossing animated film, Chen said.
Capitalizing on the emotional economy
What is unique about China’s emotional economy is how it is growing against a backdrop of slowing consumer spending.
In 2025, consumer spending in China grew by 2.3% from the year before, down from 5.2% in 2024, and 9.9% in 2023.
A People’s Bank of China survey further showed that for the fourth quarter of 2025, while interest in big-ticket purchases lagged pre-pandemic levels, the share of respondents willing to spend more on social and entertainment activities over the following three months reached an eight-year high over the same period.
In the U.S., where paid-for experiences are similarly accounting for a growing share of consumer spending, overall consumption has remained buoyant, posting quarterly growth between 0.5% and 0.9%. Unlike China, therefore, spending on emotional economy experiences in the U.S. is keeping pace with, rather than against, broader consumer spending.
This divergence has been noted by policymakers looking to spur consumer demand. Chongqing city government, for example, highlighted the role of the municipality’s emotional economy for the first time in its 2026 work report.
Businesses in China have also begun “reconsidering their value propositions,” according to DaXue’s Malmsten, with many looking into how they can lean into this trend of emotion-driven spending.
It taps into a feeling that consumers are demanding more of.
“For me, personally, buying these ‘childish’ items gives a comforting feeling of going back to childhood,” Zhou said. “It is a safe and nostalgic way of going back to adulthood.”
— CNBC’s Anniek Bao contributed to this report.
