Business

Why China’s emotional economy is on the rise

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

Business

EDECS and Assarain Group Awarded Strategic Dry Port & Veterinary Quarantine Development at EZAD IP3 by OPAZ in the Sultanate of Oman

EDECS group, , a leading EPC contractor in the MEA region, has been awarded the Construction of the Dry Port and Veterinary Quarantine at the Economic Zone in Al Dhahirah (EZAD) – IP3,Ibri provence, Al Dhahirah Governorate, Sultanate of Oman, by the Public Authority for Special Economic Zones and Free Zones (OPAZ), one of the Sultanate of Oman’s strategic economic projects aimed at advancing the objectives of Oman Vision 2040, with Assarain Group (Said Salem Al Wahaibi Group) as EDECS’ local partner in Oman. The award marks a strategic milestone in EDECS Group’s continued expansion across the GCC region and reinforces the Group’s growing role in delivering large-scale logistics and infrastructure developments.

The signing attended by Saudi and Omani government ministers and authorities, prominent public and private sector representatives, and key stakeholders from across the region, reflecting the strategic importance of the project to Oman’s future economic and infrastructure landscape.

Located in Ibri provence, Al Dhahirah Governorate, the Economic Zone at Al Dhahirah spans approximately 388 square kilometers and enjoys a strategic location approximately 20 kilometers from the Rub Al Khali border crossing with the Kingdom of Saudi Arabia and around 105 kilometers from Ibri Industrial City. The project is designed to serve as a major economic and logistics gateway that strengthens regional trade connectivity and supports economic integration between Oman, Saudi Arabia, and neighboring markets.

The development of the integrated economic zone aligns closely with Oman Vision 2040, the Sultanate’s long-term roadmap for sustainable development and economic diversification. The project is expected to contribute significantly to enhancing trade movement, attracting investments, supporting industrial and logistics activities, and creating new economic opportunities that reduce dependence on oil revenues while driving sustainable growth across the Sultanate.

The scope of work encompasses the full development cycle of the Dry Port project within the Economic Zone at Ibri provence, Al Dhahirah (EZAD), including enabling works, earthworks, infrastructure development, utility networks, and the construction of all operational and supporting facilities such as administration buildings, X-ray facilities, accommodation buildings, and associated structures, through to testing, commissioning, and final fit-out, delivering a fully integrated and operational logistics asset.

Commenting on the signing, Eng. Hussein El Dessouky, Chairman and Managing Director of EDECS Group, said:

“We are proud of our partnership with our client, the Public Authority for Special Economic Zones and Free Zones in the Sultanate of Oman on this strategic project, which marks an important milestone in EDECS Group’s regional expansion and its long-term commitment to delivering transformative infrastructure projects across the GCC countries.

The Economic Zone at Al Dhahirah is a highly promising project with significant economic and logistical potential, and we are confident that this collaboration with OPAZ will contribute meaningfully to Oman Vision 2040 by enhancing trade connectivity, attracting investments, and creating sustainable economic opportunities for the Sultanate and the wider region.”

Al Sheikh Salem Bin Said Al Wahaibi, Chairman of Assarain Group, stated:

“This agreement reflects Assarain Group’s commitment to diversifying the Omani economy and strengthening the Sultanate’s position as a strategic regional commercial and logistics hub. As a diversified group that has played a vital role in the country’s economic and social development since 1975, we remain committed to delivering excellence and innovation across our various sectors, enhancing economic competitiveness, and fostering confidence and growth in economic, social, and developmental relations across the Sultanate.

Thanks to the wise leadership and clear strategic vision of His Majesty, Sultan Haitham bin Tariq, Oman has transformed global economic challenges into promising investment opportunities through flexible policies focused on diversification, financial sustainability, and empowering the private sector as a key partner in development.

We are also proud to collaborate with EDECS Group, an EPC leader in the MEA region with extensive experience in executing complex and high-value projects. EDECS brings strong technical capabilities that are essential for this development, and we take pride in this partnership as we work together to deliver a project that creates long-term value for Oman and supports the goals of Oman Vision 2040.”

This milestone reflects EDECS Group’s position as a Grade A, EPC contractor, recognized for its innovative engineering capabilities, strong execution expertise, and unwavering commitment to the highest safety standards. EDECS Group has been present in the KSA since 2013 across the Eastern and Western Provinces, and continues to deliver complex projects across the MEA region in line with its strategic vision of selectively pursuing high-impact developments that create long-term value and support sustainable economic growth.

END –

Business

Z2A Group Holding Expands Regional Investment Vision Through Strategic Visit to Syria

Damascus, Syrian Arab Republic

Z2A Group Holding marked a prominent participation as part of the official United Arab Emirates delegation during the strategic visit to Damascus, in a move that reflects the Group’s vision to expand its regional presence and explore emerging markets with strong long-term economic and investment potential.

The visit represented an important step within the Group’s broader strategy to explore strategic investment opportunities within the Syrian market, with discussions focusing on key sectors including industry, tourism, and economic development, alongside opportunities to establish partnerships that support productive and developmental projects during the coming phase.

During the visit, the Group participated in a series of economic meetings, workshops, and discussions that brought together government officials, investors, and business leaders from both the UAE and Syria. The sessions highlighted the significant potential of the Syrian market and the investment opportunities available across several vital sectors expected to play a major role in the country’s next stage of economic growth.

The Group emphasized that its interest in the Syrian market stems from a long-term strategic vision focused on investing in high-potential markets and building sustainable partnerships based on innovation, development, and long-term economic value creation, particularly in markets with strong opportunities for growth and expansion.

Z2A Group Holding also confirmed that its current focus is primarily directed toward the industrial and tourism sectors, given their ability to generate sustainable economic impact, support productive industries, and contribute to creating meaningful investment and development opportunities in the coming years.

The Group further revealed its plans to establish a specialized investment company operating within the Syrian market, reflecting its long-term commitment to supporting developmental projects and building strategic partnerships in collaboration with partners from within the UAE and internationally.

Hamda Al Mansoori, Chief Executive Officer of Z2A Group Holding, said:

“We view the Syrian market today as one of the region’s promising markets with significant long-term investment and growth potential, not only because of the available economic opportunities, but also due to the country’s resources, capabilities, and experienced human capital capable of supporting sustainable and high-impact projects.”

She added:

“What we witnessed during the meetings and workshops reflects a genuine willingness to build meaningful economic partnerships based on long-term cooperation and knowledge exchange. At Z2A Group Holding, we believe that real investment goes beyond capital. It is about transferring expertise, developing projects, and contributing to sustainable economic value that supports growth across the region.”

Al Mansoori confirmed that the Group is currently evaluating several potential investment opportunities and projects within the Syrian market, in line with the company’s strategy to expand into promising regional markets and strengthen its presence in long-term, high-impact economic and investment projects.

The Group added that the spirit of cooperation and openness experienced throughout the visit reflects a fertile environment for future opportunities, expressing optimism regarding the future of UAE-Syrian economic relations and the possibility of launching impactful projects across several key sectors.

This participation comes as part of the Group’s wider vision to expand into emerging regional markets and strengthen its involvement in projects with long-term economic and investment impact, aligned with its strategic direction toward innovation, development, and sustainable partnerships.

The Group concluded by emphasizing that the coming phase carries significant opportunities, expressing its aspiration to become part of Syria’s next chapter of economic growth and investment, while contributing to strengthening regional economic cooperation and Arab economic integration in the years ahead.

Business

All relief measures UAE residents, businesses got since March 2026

The UAE has introduced a wide-ranging package of financial and administrative relief measures since the outbreak of the Iran conflict in March 2026, as authorities moved to shield businesses and residents from regional economic disruption.

The support measures — announced by the Central Bank, Dubai authorities, regulators and UAE banks — have focused on preserving liquidity, keeping credit flowing through the economy and reducing short-term operating costs for businesses.

Banks have rolled out loan repayment relief and restructuring support for customers. Dubai authorities have deferred government fees, extended customs deadlines and eased some residency-related procedures. Regulators have also granted temporary flexibility on reporting and compliance requirements.

‘Timely, focused relief’

The measures come as businesses across the Gulf face uncertainty linked to shipping disruptions, higher insurance and freight costs, softer tourism demand in some segments and broader regional volatility.

Analysts at KPMG noted the UAE’s economic response package was designed to provide “timely and focused relief by easing short-term financial pressures, supporting business continuity, and protecting employment in response to the ongoing regional conflict.”

The advisory firm added that the initiatives “help preserve short-term liquidity, reduce compliance and administrative burdens, and promote economic stability, while allowing sufficient time for a measured and sustainable recovery of the economy.”

Here is a breakdown of the key relief measures introduced across the UAE since March 2026:

UAE banks, borrowers

On March 17, the Central Bank of the UAE launched what it described as a Five-Pillar Financial Institution Resilience Package. The objective was to maintain financial stability, prevent a tightening of credit conditions and ensure banks continued lending to businesses and individuals affected by regional uncertainty.

1. Loan classification flexibility

One of the most significant measures involved temporary flexibility in how banks classify loans impacted by conflict-related disruptions. Normally, banks are required to move stressed loans into higher-risk categories if repayments become delayed or if borrowers show signs of financial strain.

The temporary regulatory relief allowed banks to avoid immediate migration of affected loans into Stage 2 or Stage 3 categories under accounting rules. This reduced the risk of businesses suddenly losing access to financing because of short-term disruptions tied to supply chains, tourism flows, shipping or consumer demand. The measure was particularly important for sectors such as aviation, logistics, hospitality and trade.

2. Release of capital buffers

The Central Bank also released key regulatory buffers, including:

The Countercyclical Capital Buffer (CCyB)
The Capital Conservation Buffer (CCB)

These buffers are normally maintained by banks to absorb stress during periods of economic turbulence. Temporarily easing these requirements increased lending capacity across the banking system and gave lenders more room to continue extending credit.

3. Liquidity support measures

Banks were granted additional access to portions of their reserve balances. The Central Bank also provided temporary relief on:

Liquidity Coverage Ratio (LCR) requirements
Net Stable Funding Ratio (NSFR) requirements

These measures were designed to prevent liquidity pressures from tightening credit conditions across the economy.

4. Continued lending expectations

The Central Bank also made clear that banks were expected to continue supporting customers rather than sharply reducing exposure. The guidance specifically highlighted sectors facing heightened pressure because of regional developments, including:

Aviation
Logistics
Tourism
Trade-related businesses

The regulator’s intervention was intended to prevent a broader credit squeeze at a time when businesses were already dealing with uncertainty around shipping routes, travel demand and operating costs.

Repayment, restructuring

Alongside the Central Bank measures, UAE lenders introduced their own support programmes for retail customers and businesses affected by regional uncertainty. According to banking sector figures, lenders collectively extended around Dh6.2 billion in relief and support measures for affected customers.

The measures differed between banks but broadly included:

Temporary loan repayment deferrals
Restructuring of existing loans and credit facilities
Fee waivers and charge reductions
Credit card payment flexibility
Additional overdraft support for businesses

Several lenders also expanded hardship support programmes for SMEs, which were viewed as particularly vulnerable to sudden cash-flow disruptions. Banks said the support was intended to help customers manage short-term pressure linked to higher operating costs, shipping delays and weaker business activity in some sectors.

The banking sector response followed guidance from the Central Bank that lenders should continue supporting borrowers rather than sharply tightening credit conditions.

Dh1b economic stimulus

On March 30, Dubai approved a broader economic initiatives package designed to support business continuity and reduce administrative burdens. The package became effective from April 2026.

KPMG described the measures as introducing “temporary fee deferrals, extended customs grace periods, and procedural facilitations across customs, licensing, municipal services, tourism, and residency-related processes.” The package covered multiple sectors across the emirate.

Fee deferrals, waivers

1. Administrative fee deferrals

Dubai authorities introduced a three-month deferral for a range of government administrative, registration and renewal fees. The measure aimed to reduce immediate cash outflows for businesses managing uncertain operating conditions. The deferrals applied across several government-related services between April and June 2026.

Tourism and hospitality support

Dubai also introduced temporary relief measures for the tourism and hospitality sector. Authorities postponed collection of:

The 7 per cent hotel sales fee
Tourism Dirham fees charged to hotel guests

The postponement lasted for three months and was intended to support hotel operators and tourism-related businesses dealing with softer demand and travel uncertainty. The tourism sector was viewed as one of the industries most exposed to regional geopolitical developments.

2. Housing and municipality fee relief

The package also included relief on municipal charges. KPMG noted that “establishments are permitted to defer the payment of housing fees relating to staff and labor accommodation collected by Dubai Municipality for 3 months.”

The advisory firm also said authorities approved a “deferral of general cleaning service fees” for the same period. These measures primarily benefited companies operating large staff accommodation facilities.

3. Advertising and licensing fee support

Dubai also introduced temporary flexibility for licensing-related charges. Measures included:

Deferral of advertising fees linked to commercial licences
Reduced flat fees for licence amendments

The licence amendment charge was capped at Dh500 under the temporary support package.

Customs, logistics support

Dubai authorities also introduced measures aimed at easing pressure on importers, exporters and logistics firms.

1. Extended customs declaration grace periods

One of the most significant measures involved customs declaration timelines.“The grace period for export and transit customs declarations has been extended from 30 days to 90 days, with the option of renewal for a further equivalent period of up to 6 months, subject to compliance with applicable tax and customs regulations,” explained KPMG in a note.

The extension was intended to help businesses dealing with shipping disruptions and delays linked to regional instability. The flexibility reduced pressure on companies facing longer freight routes, rerouting challenges and supply-chain bottlenecks.

2. Virtual warehouse initiative

Dubai also introduced a virtual warehouse initiative allowing temporary duty-free import of certain high-value goods. The programme initially focused on artwork and specialised goods. The initiative removed the need for financial guarantees under some temporary admission procedures.

Authorities said the measure was designed to support Dubai’s position as a regional logistics and trade hub despite wider disruptions affecting freight and transportation.

DIFC, DFSA relief measures

The Dubai International Financial Centre and the Dubai Financial Services Authority also introduced temporary measures for firms operating within the financial free zone.

1. Regulatory flexibility

The DFSA provided temporary flexibility around:

Regulatory reporting timelines
Certain staffing requirements
Governance obligations
Licensing administration processes

The measures were intended to help financial firms maintain operational continuity during a period of heightened uncertainty.

2. Payment flexibility within DIFC

The DIFC also introduced more flexible payment arrangements for:

Licence renewals
Commercial rent
Retail rent obligations

The objective was to reduce short-term financial pressure on businesses operating within the financial centre.

Workforce, residency support

Authorities also introduced measures aimed at reducing administrative friction for workers and employers.

1. Residency renewal facilitation

Residency permit issuance and renewal procedures were streamlined in some areas to reduce delays and administrative burdens. The measures were intended to support workforce continuity for businesses dealing with operational disruption.

2. Fine waivers and labour mobility support

Dubai also introduced waivers linked to some residency and labour mobility fines. The measures were designed to encourage workforce retention and simplify employee movement between Dubai and free zones.

Private-sector support initiatives

Alongside government and banking measures, several private-sector companies and organisations introduced independent support initiatives.

1. Rent relief initiatives

Major landlords and property groups introduced temporary incentives for commercial tenants. Some of the measures included:

Rent-free periods on lease renewals
Waivers on minor administrative penalties
Flexible payment structures

The support was largely targeted at SMEs and retail businesses facing weaker demand.

2. SME grants and operational assistance

Some fintech firms and private organisations also launched direct support programmes. These included:

Small business grants
Community-funded SME support initiatives
Advisory assistance for companies navigating regulatory and operational challenges

Telecom operators and technology firms also focused on maintaining service continuity and operational resilience.

Why these measures matter

The UAE’s response has focused less on broad stimulus spending and more on targeted measures designed to stabilise business activity and preserve financial confidence. The support package has largely centred on three priorities:

Ensuring banks continue lending to businesses and households
Reducing immediate operating and compliance costs
Preventing temporary disruptions from turning into longer-term financial stress

KPMG said the initiatives “provide meaningful cash-flow relief, indirect tax timing benefits, and compliance flexibility for businesses operating in Dubai.” The firm added that the measures reinforce “confidence in Dubai’s resilient, responsive, and business-friendly economic framework.”

While the economic impact of the regional conflict is yet to fully determined, particularly for sectors exposed to trade flows, tourism and logistics, the combination of banking relief, fee deferrals, customs flexibility and regulatory easing has created one of the broadest coordinated support responses introduced in the UAE since the start of the regional tensions.

For businesses and residents, the measures are aimed at one core objective: keeping liquidity flowing through the economy while limiting operational disruption during a period of regional uncertainty.

Gulf News