China Unveils 19 Measures for Domestic Service Overhaul

China’s Ministry of Commerce (MOFCOM), together with eight other government departments, issued a landmark policy package on July 20 targeting the nation’s sprawling domestic service industry. The “Several Policy Measures on Promoting the High-Quality Development of the Domestic Service Industry” contains 19 measures across five key areas, covering the entire chain from employment and vocational training to pricing regulation and credit体系建设, as reported by Xinhua News.

The policy targets a sector that has grown to immense proportions: China’s domestic service industry now generates over 1.3 trillion yuan (approximately US$180 billion) in annual revenue and employs more than 30 million workers. According to data from Tianyancha cited in the report, approximately 3.1 million enterprises have “domestic service” registered in their business scope, including 1.02 million individual businesses.

Context and Policy Background

This is the first dedicated implementation policy in the domestic service sector following the State Council’s January 2026 “Work Plan for Accelerating the Cultivation of New Growth Points in Service Consumption” (Guobanfa [2026] No. 2), which identified domestic services as one of six key sectors for service consumption growth. The State Council framework explicitly called for supporting qualified enterprises to innovate service models, explore smart scenarios, and promote the transition from agency-based to employee-based systems.

Key Measures

The 19 policy measures are organized into five areas: increasing support for domestic service enterprises, encouraging institutional innovation, strengthening vocational skills training, improving the credit information platform system, and consolidating the foundation for industry development, according to China News Service.

Pricing transparency is a major focus. The policy mandates that companies implementing tiered pricing based on worker classification must establish reasonable standards considering years of experience, professional history, skill certification, and customer evaluations — and must clearly display prices to consumers.

Contract standardization is also addressed. The policy calls for revising and publishing standard “Domestic Service Contract” model texts that clarify rights, obligations, privacy protection, and the commercial application of smart devices.

Innovation and expansion are encouraged, with local governments urged to support domestic service enterprises in exploring smart scenarios and expanding into home-based elderly care and childcare services.

Industry Challenges

Despite its massive scale, China’s domestic service sector faces significant structural challenges. According to Chen Changsheng, Deputy Director of the State Council Research Office, the national domestic service sector faces a labor gap of over 20 million positions.

Fan Xianwei, a researcher at the NDRC Institute of Social Development, highlighted the core pain points: “‘Good nannies are hard to find’ and ‘spending high prices but not getting good service’ have become common frustrations for many families,” as reported by the Economic Information Daily.

The industry has long been characterized by what Fu Yifu, a special researcher at Su Shang Bank, described as “small, scattered, and chaotic” operations, with limited brand recognition and professional standards. Most workers operate under an “agency system” where they function as temporary workers without formal employment contracts, social insurance, or career development pathways.

Expert Analysis

Hong Yong, an associate researcher at the Chinese Academy of International Trade and Economic Cooperation under MOFCOM, said the measures “focus on the blockages and difficulties facing the development of the domestic service industry, stimulating consumption potential through quality improvement and capacity expansion, while also enhancing the industry’s employment absorption capacity.” He noted that the policy achieves multiple goals of promoting consumption, stabilizing employment, and benefiting people’s livelihoods.

Fu Yifu identified three major effects of the policy. First, it promotes business format upgrades by encouraging enterprises to break through traditional service boundaries and expand into high-end segments like deep cleaning and smart home care, using big data for precise supply-demand matching. Second, it releases integration dividends by supporting deep integration of domestic services with elderly care and childcare, opening up trillion-yuan incremental market space. Third, it reshapes the industry landscape by cultivating leading enterprises and promoting the transition from “agency system” to “employee system,” leading the industry from “guerrilla forces” to a “regular army.”

Shanghai’s Pioneering Role

Shanghai has emerged as a pioneer in domestic service reform. In October 2025, the city issued a three-year action plan (2026-2028) to cultivate employee-based domestic service enterprises. By early 2026, 16 enterprises had been certified as Shanghai’s first batch of employee-based enterprises, covering 1,850 transitioned employees across maternal and infant care, elderly care, and comprehensive services.

Looking Ahead

The effectiveness of the policy will depend heavily on local government implementation, which may vary significantly across regions. Small and medium-sized enterprises may struggle with the costs of transitioning to employee-based systems, while some workers may prefer the flexibility of the agency system.

Nevertheless, as a labor-intensive sector with over 30 million workers and 1.3 trillion yuan in revenue, successful reform could make domestic services a significant contributor to China’s transition toward a consumption-driven economic growth model. The policy represents a concrete step toward professionalizing an industry that touches the daily lives of hundreds of millions of Chinese families.

Reporting contributed by Xinhua News, China News Service, and the Economic Information Daily.