The first year of college was punishingly lonely for the young medical student. Brought up in a poor village, he had little in common with his wealthier urban peers. He made no friends. No one listened to him. All he did was study.

It might be a tale of China's growing social divisions. But instead of begrudging the other students their advantages, or bemoaning cliques, Zhang Yin concluded that the problem lay inside. Agonised by his sense of isolation, he turned to a counsellor for help.

What began as a search for meaning in his life became his vocation: he is researching stress and depression at Changsha University and hopes to train as an existential therapist. "I want to know how others relieve their pain and anxiety and discomfort," the 24-year-old said.

Zhang's enthusiasm for the "talking cure" reflects a wider surge in interest, as China's citizens seek meaning beyond the quest for prosperity.

"Chinese people have been hungering and searching for something for a long time since the collapse of Maoism. Every so often there's a certain 'fever' sweeping the country," said Huang Hsuan-ying, an ethnographer who has been studying the boom in psychotherapy in China since 2007. "It fits into that long-term search for something that is not only material."

Others suggest the hunger is sharpened by the traumas of China's modern history – war, famine and the cultural revolution – and the turn to private enterprise, which has boosted economic wellbeing but uprooted identities and dislocated families.

Although Sigmund Freud's work was translated into Chinese in the 1920s, the initial flurry of interest was soon suppressed. Under Mao, psychology was banned in 1966 and psychiatry followed a largely medicalised model. Desperate gaps remain in mental health services in general, particularly in the countryside.

Zhao Xudong, of Tongji University, in Shanghai, has said there are just 20,000 psychiatrists in the country. Yet evidence from other countries suggests China will need 100,000 more to meet the population's needs in coming years.

Although there are 400,000 psychological counsellors registered with the country's ministry of labour, many in the profession believe the licence is too easy to obtain.

However, public interest is now matched by official recognition: China's first mental health law, 27 years in the making, came into force last year. It acknowledges the role of psychotherapy and introduces a framework for its practice.

Practitioners say patients often report problems such as stomach ache or insomnia, and may expect drug-based treatments – even when they acknowledge psychological causes.

Younger, better-educated people are more open to the idea of therapy, rather than drugs, than older ones. Zhang says his parents simply do not understand what psychotherapy is.

Even so, another student noted that older relatives have begun to turn to her for advice. Famous therapists such as Li Zixun appear on the TV show Psychology Talks and write columns on the subject. Psychological intervention is common after disasters.

Broader cultural changes are helping psychotherapy flourish. Many of the generation taking an interest "can't say 'I love you' to their parents, and their parents would never say it to them – but they would say it to their children", said Huang, of the Australian National University's Centre on China in the World.

At the International Federation for Psychotherapy's conference in Shanghai this summer, Chinese speakers ranged over subjects from psychocardiology and psychoanalysis to the application of standardised rating scales in treating children with attention deficit hyperactivity disorder.

At times, the event had the air of a fan convention, with young acolytes rushing up after talks to have their picture taken with the speakers. Chinese conferences often invite amateur enthusiasts alongside experts – asked why she was taking part, one woman replied: "I have three children."

Huang said many people train but never become professionals, or abandon the work soon after they begin. Fees for public work are set low – at about 70 yuan (£7) an hour – but while private sessions can command 10 times that, it is hard to build a stable client base.

Sometimes the problems reflect prosaic cultural differences, such as an incomprehension of formal aspects of western practice: "They can't understand why they have to see you every week at the same time – 'If I like you, why can't we go out for dinner?'"

Many of those at the Shanghai conference identified more fundamental contradictions between psychotherapy as practised in the west and Chinese traditions. They argued that western culture seeks to build a stronger self, while eastern culture seeks to overcome the self; or that European and US thinkers tend to focus on the individual, while Chinese thought considers the person in context.

"Harmony is first: the individual is second," said Zhong Jie, an assistant professor at Peking University. He cited the case of a patient who quit when she realised treatment was making her confront her conflict with her husband.

Others see unexpected alignments and convergences between aspects of traditional Chinese thought – particularly Daoism – and psychotherapy.

Bao Tiankui runs group sessions: a practical response to the lack of trained therapists, but one that might seem particularly unsuited to a culture so deeply imbued with emotional privacy.

Chinese participants seem to have a stronger sense of self-protection at first, he said. Yet once they start to open up, they are actually more willing to discuss their problems and get closer to the group.

"Chinese thinking and psychoanalysis – I think it's a good encounter," said Teresa Yuan, an Argentinian who has been visiting China to teach since the mid-1990s. "Maybe there will be a new beginning to psychoanalysis that can be fed by Chinese thinking."