Holiday consumption adds luster to China’s economic recovery
As the 8-day Golden Week holiday approaches, tourists are swarming to China’s famous landmarks like Tian’anmen Square in Beijing, the Bund in Shanghai, and West Lake in Hangzhou, East China’s Zhejiang Province. The vibrant atmosphere, buzzing with excitement and activities, serves as a vivid reflection of the unwavering confidence of the Chinese people in the country’s economy and bright future.
An estimated around 800 million travel trips will be made during the eight-day Mid-Autumn Festival and National Day holidays which will kick off on Friday. With record demand for travel and the sustained economic impact of the Asian Games, this year’s Golden Week holiday is poised to become the most vibrant and prosperous in recent memory.
As an important window to observe economic vitality, the upcoming Golden Week holiday will lead a significant consumption rebound in the fourth quarter, playing a crucial role in driving economic growth throughout the entire year, experts said.
Despite downward pressure due to multiple factors, China’s consumer market is currently displaying signs of recovery and growth. The resilience, potential, and dynamism of consumption remain strong and unchanged, experts said, refuting Western’s bearish outlook on Chinese economy.
Hundreds of millions hitting the road
Latest data on holiday travel, accommodation, and tourism products all pointed to a stark rebound from the levels seen in 2019, indicating a remarkable resurgence in consumption activity.
Wednesday marks the first day of the Golden Week holiday travel rush. The railway network in the Yangtze River Delta region is expected to deliver more than 2.5 million passenger trips on Wednesday, 600,000 above the 2019 level, representing growth of over 30 percent, according to China Railway Shanghai Group Co.
According to the China Tourism Academy, over 100 million travel trips will be made per day during the Golden Week holiday, far surpassing the levels of last year and 2019. In terms of commercial aviation, more than 21 million travelers will take flights in the span of eight days and an average of 14,000 domestic flights will be operated per day, up 18 percent from the same period in 2019. China Railway Group forecast that 190 million railway trips will be made during the holidays, up from the 138 million trips seen in 2019.
Hotel bookings for popular destinations have also surged. Data from Qunar showed that domestic hotel bookings for the holidays have increased by 514 percent compared to 2019.
Outbound tourism is expected to see a 20-fold year-on-year increase, according to online traveling platform Trip.com. Travel agency U-tour predicted the number of outbound travelers would exceed this year’s May Day holidays by five folds.
According to the National Immigration Administration, the average daily number of inbound and outbound passenger trips during the holidays is expected to reach 1.58 million, three times higher than the same period last year.
Additionally, traveling to Hangzhou, East China’s Zhejiang Province has become a spotlight and a unique spark for holiday spending as the eight-day holidays coincide with the main competition days of the Hangzhou Asian Games which last from September 23 to October 8.
China to witness travel boom and robust consumption in upcoming Mid-Autumn Festival and National Day holidays. Editor: Zhang Mingyue/GT Graphic: Xu Zihe/GT
Data from the online travel platform Fliggy shows that during the Asian Games, international flight bookings bound for Hangzhou have surged 20 times compared to the same period last year. Train ticket bookings have recorded a 4.7 times year-on-year growth, and hotel bookings near venues have increased by three times compared to last year. The other five cities in the province co-hosting the games also experienced a boom in tourist numbers.
With a substantial surge in bookings for flights, train tickets, accommodations, and tourism products, this holiday break is expected to unleash further consumption potential which vividly illustrates the positive trajectory of the Chinese economy, experts said.
In light of record booking and travel data, indicating a growing consumption enthusiasm, Tian Yun, a Beijing based economist attributed the growth to the lengthier holiday break and spill-out effect of events like the Asian Games, which have injected energy into the economy.
Accelerator of economic growth in Q4
Experts predict that thanks to effective macroeconomic stimulus policies and the boost from the Golden Week holiday, consumption will bounce back strongly in the fourth quarter, playing a crucial role in driving economic growth for the entire year. They have also dismissed smear and bearish outlook painted by some foreign media and Western politician about the Chinese economy.
China’s retail sales, a main gauge of consumption, beat expectations in August thanks to a bumper summer travel peak and consumption-boosting measures, data from the National Bureau of Statistics (NBS) showed.
Driven by the accelerated sales of travel and a wider range of spending options, retail sales of consumer goods in August recorded a year-on-year growth of 4.6 percent to 3.79 trillion yuan ($521.13 billion), 2.1 percentage points higher than the growth rate in the previous month, according to the NBS.
Experts said that the Golden Week holiday and the Asian Games will further accelerate the consumption recovery and economic growth in the fourth quarter, expecting more policy tools to kick in. In addition, the Belt and Road Summit in October and the China International Import Expo in November will both provide a strong boost to China’s economy and development.
The extended holiday period provides a significant opportunity for a retail spending peak and is expected to have a significant impact on the GDP growth in the fourth quarter, acting as “an accelerator,” Cong Yi, a professor from the Tianjin University of Finance and Economics, told the Global Times on Tuesday.
The Asian Games in particular will be a major boost for consumption-related sectors from sports and culture to catering for the host city and nearby cities in East China’s Zhejiang Province as well as the Yangtze River Delta region, Cong added.
According to media reports, citing official information from Zhejiang Province, the preparations for the Asian Games between 2016 and 2020 are estimated to have added about 414.1 billion yuan to Hangzhou’s economy, accounting for 7.6 percent of the city’s total economic output during that time. It also led to an increase of around 103.3 billion yuan in government revenue, which is about 8.2 percent of the total revenue collected. Additionally, the Games has created job opportunities for approximately 670,000 people, accounting for 2.4 percent of the total employment during that period.
The consumption vitality generated by the Hangzhou Asian Games extends far beyond Hangzhou, with the ripple effect gradually emerging in various parts of Zhejiang Province and even the entire Yangtze River Delta region.
During the Asian Games, hotel bookings in Ningbo, Wenzhou, Huzhou, Shaoxing, and Jinhua cities have all increased by more than fivefold compared to 2019, with Shaoxing experiencing the highest growth rate of 720 percent in hotel bookings.
China to witness travel boom and robust consumption in upcoming Mid-Autumn Festival and National Day holidays. Editor: Zhang Mingyue/GT Graphic: Xu Zihe/GT
Beyond the tourism, the sports craze sparked by the Asian Games has ignited the sports economy, sports manufacturing and foreign trade. According to customs data, the export of sports goods from Yiwu, East China’s Zhejiang Province reached 5.08 billion yuan in the first eight months of this year, a year-on-year increase of 33 percent.
Tian said that the sustained success of the Asian Games and other major events this year will continue to further drive not only domestic consumption but also international consumption, presenting a window for China’s opening-up.
Expert noted that China’s consumption potential remains untapped and a massive household saving indicates a significant market for emerging consumer goods and upgraded consumption needs.
By the end of August, the balance of savings deposits for urban and rural residents in China exceeded 7 trillion yuan for the first time, standing at 7.06 trillion yuan.
More can be done to stimulate the consumer market, Tian said, pointing to upgraded consumption demand and new consumption drivers.
New-energy vehicles, domestically produced 5G smartphones, domestically produced large aircraft, and the cruise economy will all become new growth points for China’s consumer economy, Tian said.
He is confident that with the government’s efforts, the gradual recovery of individuals from the pandemic’s impact, the retail sales growth could reach 6 percent in the fourth quarter.
“It is expected that macro policies will focus on creating more jobs and promoting economic growth in the fourth quarter. It will also address long-term issues like aged care to boost market confidence,” Tian said.
China to witness travel boom and robust consumption in upcoming Mid-Autumn Festival and National Day holidays. Editor: Zhang Mingyue/GT Graphic: Xu Zihe/GT
Li Yong, president of Chongqing Frontier Regional Economic Research Institute, told the Global Times that stimulating consumer spending through the issuance of shopping vouchers is a good method, especially for the catering and tourism sectors, which will encourage people to visit malls and take trips.
Experts also defied attacks by some Western politician and media outlets that paint the Chinese economy as being at the cusp of collapse.
Cong dismissed smear from foreign media, as the trend of consumption upgrading in China’s massive market of 1.4 billion people remains unchanged. He also noted that the bearish view on the Chinese economy is a long-standing line of attack from sections of the Western media, yet it has never managed to drag down China’s economy.
“China is well on track to achieve the GDP growth target of around 5 percent for the whole year, and the final quarter growth will solidify the target,” Cong said.
Tian predicted China’s economic growth to grow at around 5.2 percent for this year.
“Actions speak louder than words. As China remains focused on its economic work, progressing at its own pace and avoiding empty rhetoric, there is no need to pay attention to Western attempts to discredit it,” Li said, predicting China’s economic growth would finish in a range of 5 percent to 5.2 percent this year.
(Global Times)
