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China’s Year of the Dragon opened with a surge in consumer spending and travel during the holiday period, marking a boost for the country’s sagging economy.
The country’s culture and tourism ministry said there were 474mn domestic trips during the eight-day lunar new year festival, up 34 per cent year on year and 19 per cent on pre-pandemic levels in 2019.
This Chinese new year, with official holidays ending on Sunday, was the first in five years to be unaffected by the coronavirus pandemic or related restrictions, making it an important barometer of consumer sentiment.
Chinese policymakers hope domestic demand will help to get the moribund economy back on track, with a property crisis and weak investor confidence weighing heavily on activity.
The lunar new year is the closest parallel in China to Christmas, with most companies and factories closed and the country’s must-see tourist sites overrun with visitors. Tourists spent Rmb633bn ($89bn) during the period, up 47 per cent from a year earlier and 8 per cent on 2019, the data showed.
Shen Meng, director at boutique investment bank Chanson & Co in Beijing, noted the post-pandemic holiday came amid tough times, prompting many to open up their wallets and “release their stress”.
“People are also hoping the Year of the Dragon will bring a breakthrough for the economy,” he said.
China’s statistics agency earlier this month reported a steep year-on-year contraction for the consumer price index in January. Growth in retail sales has also been slow for months.
Analysts at Jefferies estimated that while overall tourist spending rose during the holiday this year, spending per tourist was down 9.5 per cent from 2019 levels.
Qiu Jun, a teacher from Shenzhen who took a five-night trip to Macau, Zhongshan and Zhuhai, said the tough economy meant she was more restrained with her spending.
“We haven’t bought things and can’t buy luxury goods,” she said, noting she used to be “more relaxed in terms of buying things and eating food”.
Analysts said travel and tourism had been among the few bright spots for China’s economic recovery. Trips to Singapore, Malaysia and Thailand during the holiday were up 30 per cent over 2019, according to the booking site Trip.com. Singapore and Malaysia extended visa-free travel to most Chinese citizens in recent weeks.
Data from the culture ministry showed that 3.6mn tourists ventured abroad and 3.2mn travellers entered China during the spring festival.
Hong Kong, which hosted its HK$13mn ($1.7mn) harbourside fireworks display for the first time since the start of the Covid-19 pandemic, lodged 750,000 visitors over its four-day holiday period, 650,000 of whom came from the mainland, just ahead of the number of arrivals from China in 2018, the government said.
The culture ministry said China’s domestic box office brought in nearly Rmb800mn during the holiday, up 80 per cent from a year earlier. Movie-goers flocked to a self-help film called YOLO, about an overweight woman who loses pounds and finds herself through boxing.
