China’s ‘golden week’ spending and travel surge seen as economic boon
- The release of pent-up demand among consumers could help lift China’s economy out of the doldrums
- Highway traffic in China could hit an all-time high on Friday, with 66 million vehicle trips expected, according to transport authorities
China’s longest holiday stretch of the year presents a golden opportunity to give the beleaguered economy a shot in the arm.
Travellers and consumers are expected to be out in full force during the “golden week” holiday that begins on Friday and lasts until October 6.
While the ongoing release of pent-up demand will add fuel to China’s economic recovery, which has recently shown initial signs of stabilisation after a disappointing second quarter, a strong rebound in the service sector has yet to spread to the broader economy, according to economists.
Travellers are ... seeking authentic and off-the-beaten-path experiences
Data from Chinese travel platform Trip.com showed that air-ticket-booking volume over the eight-day holiday - which this year combines the Mid-Autumn Festival and National Day - rose nearly fivefold, year on year, and that hotel-booking volume had increased by more than eight times.
“This year’s holiday season reflects a strong desire among travellers for unique and immersive experiences,” Jane Sun, CEO of Trip.com, said in a press statement.
“We’ve observed a significant shift towards high-quality services and in-depth travel encounters,” Sun said. “Travellers are not just exploring popular destinations but also seeking authentic and off-the-beaten-path experiences.”
China Railway expects around 190 million train trips to be taken from September 27 to October 8, which would be a daily average of 15.8 million trips. That’s compared with 139 million trips taken in 2019 from September 29 to October 7, or a daily average of 15.4 million. The upcoming travel period is longer because the two aforementioned holidays fall close to each other.
The Ministry of Transport said the country’s highway traffic could reach an all-time high on Friday, with 66 million vehicle trips expected.
Multiple cities across the country are issuing consumption vouchers to boost local consumption and attract tourists. Officials in the southern city of Guangzhou announced on Tuesday that it would hand out 130 million yuan (US$17.8 million) worth of vouchers during the holiday, at shopping centres and supermarkets.
The city of Ganzhou in Jiangxi province said it would issue 11.5 million yuan worth of tourism consumption coupons to be used at designated supermarkets, scenic spots and hotels.
“October holiday travel is likely to see faster growth than the summer holidays,” an HSBC report said last week.
Economists from Nomura expected catering-related consumption to continue performing well, boosted by both holiday demand and the Asian Games in Hangzhou.
“Sector data from major restaurant chains suggests that catering-service consumption has remained generally healthy,” they said in a report on Wednesday.
But as the release of pent-up demand fades, the services activity may lose momentum, according to the report. Meanwhile, the consumption of goods has been lacklustre, except for auto sales, it added.
For the property sector – once the biggest economic driver but now the biggest drag on the national economy – sales have picked up following the introduction of new property-easing policies in the past few months, according to the HSBC report. But it also noted that “this coincides with a typical seasonal uptick in September and October”.
“The effectiveness of recent easing measures to deliver results in excess of seasonal fluctuations remains to be seen,” it said.
