SHANGHAI, China – Travel and spending in China surged during the Lunar New Year holiday, exceeding pre-pandemic levels and indicating an improvement in the country’s economy. According to data released by the Ministry of Culture and Tourism, there were 474 million domestic trips made during the eight-day festival, representing a 34.3% increase from the previous year.
Domestic holiday trips in China generated nearly 632.7 billion yuan (equivalent to $87.95 billion), marking a 47.3% year-over-year increase in spending. State broadcaster China Central Television reported that domestic trips saw a 19% rise compared to the same period in 2019, while spending increased by 7.7%.
The Chinese mainland experienced 3.6 million tourist departures and 3.23 million tourist arrivals during the holiday period, according to the ministry. Furthermore, mutual visa-free travel with certain countries hastened the recovery in both outbound and inbound travel during the Lunar New Year.
The strong data comes as policymakers in China aim to stimulate domestic consumption amid deflationary pressures. The Lunar New Year holiday is a crucial period for assessing consumer sentiment in China, being the country’s most important holiday.
However, while the travel surge indicates a positive trend, the sustainability of this growth remains uncertain, with tourism revenue per trip still below pre-pandemic levels. Analysts urge caution, highlighting that the remarkable year-over-year growth rates reflect pent-up demand from consumers after being impacted by pandemic-related factors in 2019 and 2020.
After a week-long closure for the holiday, China’s stock market reopened with a surge in the tourism sector and growing anticipation of additional stimulus measures from the government to support the economy and bolster spending.
The People’s Bank of China held a key policy rate steady, while market participants also monitored the U.S. Federal Reserve and its potential impact on Chinese policy. A delay in U.S. rate cuts could limit Beijing’s flexibility in managing its own monetary policy, particularly in relation to the yuan.
As China seeks to further boost its economy, the country has been encouraging local businesses to accept foreign bank cards and exploring other measures to facilitate mobile payments for international visitors.
The surge in travel and spending during the Lunar New Year holiday paints a promising picture for China’s economy, but uncertainty remains as the country continues to navigate through post-pandemic recovery and international monetary developments.