China’s consumers spend US$21 billion during May Day holiday, but easy part of economic recovery ‘is done’
- Domestic tourism revenues jumped to 101 per cent of pre-pandemic levels, reaching 148 billion yuan (US$21.4 billion), during the five-day ‘golden week’ holiday
- Around 274 million people travelled over the Labour Day or May Day holiday, but the ‘easy part of China’s post-reopening recovery is done’, analysts said
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Thousands of tourists flock to China’s Great Wall during ‘golden week’, as travel numbers rebound
China’s services sector enjoyed a long-awaited recovery in consumer spending over the five-day “golden week” holiday, with the level of domestic tourism revenue exceeding 2019 levels for the first time since the start of the coronavirus pandemic.
But after domestic tourism revenues jumped to 101 per cent of pre-pandemic levels, reaching 148 billion yuan (US$21.4 billion), analysts warned the explosion of pent-up demand might not be sustainable, with the next leg of the economic recovery set to be more arduous.
Around 274 million people travelled over the Labour Day or May Day holiday, which concluded on Wednesday, with the figure reaching 119 per cent of pre-pandemic levels in 2019, according to the Ministry of Culture and Tourism, as tourists flocked to attractions after China lifted its last remaining virus restrictions at the start of the year.
“The strong Labour Day holiday tourism data, together with the still-solid April services [purchasing managers’ index], bode well for consumption and services recovery in coming months, despite the softening in manufacturing growth momentum,” Goldman Sachs said on Thursday.
The next leg of consumption recovery will rely on higher income growth and improved consumer confidence, which will make the recovery model more sustainable