The Lunar New Year holiday in China has been a crucial period for assessing consumer behavior and economic vitality. In 2024, the holiday saw a resurgence in travel activity and spending, surpassing pre-pandemic levels.
Also Read: UK Economy Went into Recession in Second Half of 2023
During the eight-day Lunar New Year festival, China recorded a 34.3% year-on-year increase in domestic trips, totaling 474 million.
Concurrently, domestic tourism spending soared by 47.3%, reaching a 632.7 billion yuan ($87.95 billion). International travel saw a resurgence, with 6.83 million trips made, showing a pent-up demand for overseas exploration.
The surge in travel spending is seen as a positive indicator for China’s economy, signaling a revival in consumption.
After years of pandemic-induced restrictions and economic challenges, this holiday spending offers a glimmer of hope for policymakers struggling with deflationary pressures and tepid growth.
A report shows that while travel numbers have surpassed those of 2020 and 2021, spending per trip remains slightly below pre-pandemic levels.
Analysts caution that this discrepancy shows a degree of consumption downgrading, suggesting that consumers are still exercising caution in their expenditure habits.
Despite the growth in travel numbers and spending, analysts caution against over-optimism. Average spending per trip remains below pre-pandemic levels, suggesting a trend of consumption downgrading.
Also Read: Japan Loses its Spot as the 3rd Largest Economy
This phenomenon underlines lingering economic uncertainties and challenges faced by both middle-class and lower-income groups.
Chinese tourists ventured to more distant destinations during the holiday period, with international flight bookings and hotel reservations saw exponential growth.
Popular destinations included Southeast Asia, Japan, South Korea, and Singapore, benefiting from visa-free policies and interest in overseas travel.
The Lunar New Year holiday also saw a surge in entertainment spending, particularly in the film industry. China’s box office revenue exceeded 8 billion yuan over the eight-day period, setting a new record. Domestic films dominated the market, showing strong domestic demand for cinematic experiences.
China’s economy faces headwinds such as a property market crisis, weak exports, and concerns about deflation.
Uncertainties loom regarding the sustainability of consumer spending beyond the holiday period, especially in the global economic uncertainties and policy shifts.
Chinese policymakers are monitoring economic indicators and implementing measures to support growth.
The People’s Bank of China has maintained policy rates steady, while exploring avenues to stimulate domestic demand and bolster consumer confidence.
Initiatives such as facilitating foreign transactions and promoting mobile payment options for international visitors shows efforts to adapt to changing consumer preferences and global economics.
Also Read: PM Narendra Modi to Inaugurate Bharat Mart in UAE
