Final consumption expenditure's contribution to economic growth reached 78.5 percent in the first half of 2018 with strong momentum in service consumption, People's Daily reported on Monday.

"The upgrade of China's consumption structure has been accelerated. On the one hand, the growth of ungraded products in physical goods consumption has been increased fast. On the other hand, service consumption maintains relatively rapid growth," said Huang Zhilong, macro-economy research chief at the Suning Institute of Finance.

Service consumption in sports, health and travel has shown strong momentum and the national residents' per capita expenditure on physical fitness activities, medical, hotels and transportation increased 39.3 percent, 24.6 percent, 37.8 percent and 22.8 percent, respectively, in the first half of this year.

People have strong demand for high-quality service to enjoy comfortable life, and consumers' per capita expenditures on catering services and housekeeping services have increased 16.6 percent and 33.1 percent in January- June period.

Meanwhile, consumers are investing more in personal care, education and training with double-digit rapid growth in expenditure on cosmetics, adult and pre-school education and training.

Stable development in service industry demonstrated strong momentum in service consumption. In the first six months of this year, service industry production index increased 8 percent year-on-year and the growth rate of each month was over 8 percent year-on-year. The electricity consumption in service industry remained above 14 percent, indicating service industry's production and consumption still remain strong vitality.

Strong consumption demand is also reflected by consumer confidence index. In the second quarter of this year, China's consumer confidence index was 121.3, remaining in optimistic interval for 3 consecutive quarters.

Healthy, green and smart innovative products have become a new selling point in consumption market in the first half of 2018. Individualized products have become popular among consumers.

A report by China Association for the promotion of trade and promotion revealed nearly 95 percent respondents showed interested in individualized products and consumers have new requirements for technological elements contained in the products and services.

Consumption will remain the driver for China's economic growth and to make it more functional, residents' consumption demand should be stimulated, residents' revenue should maintain growth, and supply-side reform should be deepened to provide higher quality products and services, said Ren Xingzhou, research fellow at Institute for Market Economy, Development Research Center of the State Council.

"China should pay attention to global factors and global markets to promote domestic industrial upgrading by using global products and services to satisfy diversified and high-qualified domestic demand," Huang Zhilong said.

In terms of consumption structure, an increasing number of imported products are consumed by Chinese residents. With more measures to expand import, Chinese consumers will enjoy more diversified and cost-effective products from the globe to satisfy their demand to pursue a better life.

The consumption situation in the second half of the year is expected to be better than the first half with boom of festival consumption and large-scale sales as well as policies promoting imports, said Zhao Ping, director of the research department at the China Council for the Promotion of International Trade.