'Happiness economy' can drive growth, adviser says

As China seeks fresh momentum to boost domestic demand, the burgeoning happiness-driven consumption sector could emerge as a trillion-yuan engine for high-quality economic growth, according to a national political adviser.

Zhang Yi, a member of the National Committee of the Chinese People's Political Consultative Conference, focused on the "happiness economy" — a consumption model centered on emotional fulfillment and spiritual value — during this year's two sessions.

"Following extensive field research, I've discovered that the shift from functional utility to subjective experience represents a vital transformation in China's consumer landscape," Zhang said.

Though not an official economic term, Zhang describes the happiness economy as a new cultural consumption pattern that embeds happiness, fulfillment and personal value into products and services.

Unlike traditional models, this approach prioritizes spiritual gains and emotional resonance, creating a sustainable cycle of repeat purchases driven by how a product makes consumers feel rather than simply what it does, particularly among younger generations.

Data underscores the sector's potential. According to iiMedia Research, China's emotional economy market expanded from 1.63 trillion yuan ($235.4 billion) in 2022 to 2.31 trillion yuan in 2024, and is projected to exceed 4.5 trillion yuan by 2029. More than 90 percent of young consumers recognize emotional value, with nearly 60 percent willing to spend money on it.

Zhang said once basic functional needs are met, the pursuit of achievement and happiness becomes a primary driver of spending. In that context, he said, the happiness economy is not a fleeting trend but a structural shift in the market sustained by ongoing emotional engagement.

However, Zhang said several bottlenecks are preventing the sector from reaching its full potential, with a key challenge being the mismatch between supply and demand.

"Many domestic industries remain trapped in pricing wars or functional competition, failing to address consumers' growing desire for identity and emotional connection," he said.

He added that even when China produces major cultural hits — such as the animated film Ne Zha 2 and the popular video game Black Myth: Wukong — their industrial chains remain fragmented. These successes often fail to translate into robust long-term ecosystems involving derivative products or integrated tourism, leaving significant revenue potential untapped.

To address these gaps, Zhang proposed a stronger government role, beginning with high-level industrial research.

"Efforts by enterprises and cross-industry associations alone are insufficient," he said. He suggested that the government lead research using social media analytics and search engine data to map consumer sentiment. These efforts would help policymakers align industrial planning with the public's emotional and cultural preferences, ensuring that the happiness being produced matches the happiness consumers seek.

Zhang also proposed expanding consumption subsidies beyond tangible products to include experiences linked to happiness consumption. Incentives for cultural experiences and performances could help broaden the consumer base, he said.

Financial and structural support should also shift toward light-asset operations, Zhang said. He called for financial instruments designed to support intellectual property development, ensuring that resources — including land, specialized talent and data — are directed toward creative and emotional industries.

He said the core competitiveness of the happiness economy should be built on strong intellectual property, anchor enterprises and a comprehensive ecosystem that supports small and medium-sized creative businesses.

Zhang also recommended integrating traditional industries with the happiness economy, developing compelling narratives for cultural tourism projects that can drive consumption across sectors, and incorporating these concepts into urban renewal efforts.

"The happiness economy represents a promising frontier that could reshape consumption patterns by tapping emotional connections and value identification, potentially unlocking significant economic value while improving quality of life," Zhang said. (Source: China daily)