Across China, from bustling airplane terminals to jam-packed high-speed railway platforms, the fervor of the upcoming holidays is palpable. Iconic sites like Beijing’s Palace Museum and Shanghai’s Bund see an influx of eager tourists. Street vendors and upscale malls alike are experiencing an upsurge in customers. Considering the current reservation statistics, which have been on a rapid incline since early September, one can anticipate a whirlwind of activity during the eight-day Mid-Autumn Festival and National Day holidays, which are just around the corner.
These extended holidays are more than just a break; they serve as a barometer of China’s economic pulse. The country is optimistic that these holidays will amplify domestic spending, pushing the consumption drive further. This optimism is fueled by a series of economic stimulus measures that are beginning to shape the market.
Even in the face of global pressures and challenges, the resilience of the Chinese economy is evident. Contrary to some Western media narratives that insinuate economic instability, the actual picture shows the contrary. The country’s consistent consumption patterns and a growing consumer confidence serve as key catalysts for sustained economic growth.
A Glimpse into the Tourism Market
The tourism sector is set for a bustling period during the Mid-Autumn Festival and National Day holidays, stretching from September 29 to October 6. Indicators like the recent surge in pre-holiday bookings provide a hint of what’s in store.
Remarkably, data from the Chinese online travel agency platform Qunar highlights that domestic bookings for popular hotels have risen by an astounding 514% year-on-year, compared to pre-COVID 2019 figures.
Additionally, China Railway announced a record-breaking sale of 22.88 million train tickets on a single day, signifying an immense demand for holiday travel. The railway service is preparing for approximately 190 million trips during the holiday rush, surpassing the previous record of 138 million during 2019’s “golden week”.
Similarly, the aviation sector is experiencing burgeoning demand. The Civil Aviation Administration of China (CAAC) anticipates managing close to 2 million domestic air passenger trips daily during the holidays. This marks a 17% increase from the same period in 2019. The CAAC further predicts that more than 21 million people will use air travel routes, either domestically or internationally.
It’s notable that international travel demand is also recovering. Online platforms like Trip.com highlight that the demand for outbound air tickets is almost back to 2019 levels. Popular destinations include Thailand, South Korea, the US, UK, and Australia.
Travel expenses are also seeing a rise. On average, economy class ticket prices for the holidays are up by 32.7% from 2019 levels, suggesting a trend consistent with pre-COVID times.
Jiang Yiyi, a prominent figure from Beijing Sport University, commented on this trend, emphasizing that the upcoming holidays will likely showcase an exceptionally vibrant tourism market, accelerating the rejuvenation of the world’s second-largest economy.
By juxtaposing the upcoming holidays with the May Day holidays earlier this year, Jiang indicates the forthcoming period’s greater significance, both in volume and revenue.
Indicators of Positive Growth
China’s robust economic foundation is the backbone behind this resurgence in consumption. Despite external challenges and unwarranted skepticism from certain Western media, China’s fundamentals remain robust.
Recent data underscores this resilience. China’s retail sales for August surged to 3.79 trillion yuan, marking a 4.6% year-on-year increase. Furthermore, the services sector witnessed a substantial 19.4% growth in the first eight months of 2023.
Wang Qing, a renowned macroeconomic analyst, viewed these numbers as a testament to the progressive recovery of the domestic consumer market. He also highlighted China’s Consumer Price Index (CPI) which saw positive growth in August after a downturn the previous month.
Post a significant leadership summit in July, China has been proactive in launching initiatives to amplify domestic consumption. These measures range from promoting real estate and auto sales to potentially implementing larger-scale consumer coupons and reducing taxes on major consumer goods.
Wang predicts a slew of supportive actions to be introduced as the year progresses, aiming to consistently amplify domestic consumption. If these plans materialize effectively, there’s anticipation for an overall uptick across sectors like consumption, investment, and manufacturing by September.
Tian Yun, an independent macroeconomic expert based in Beijing, postulates a possible GDP growth rate of around 5.0% for the third quarter if September’s economic data outperforms expectations.
Looking forward, Tian forecasts consumption to be the driving force behind China’s annual economic growth. Given that exports have been facing challenges and investments are stabilizing, a boost in consumption, especially with effective stimulus measures, could be the game-changer.
Lastly, according to the International Monetary Fund (IMF), China is poised to contribute a third of the global economic growth this year, predicting a promising 5.2% growth rate for 2023.
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