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China’s Lunar New Year Spending Up 47%, Beats Pre-Covid Levels

While the tourism boom will offer some relief to Chinese policymakers, the sustainability of the boost remains uncertain as the country’s faces deflationary risks and slowing demand


Travellers walk with their luggage outside the Beijing railway station during the Spring Festival travel rush following the eight-day Lunar New Year holiday, in Beijing, China
Travellers walk with their luggage outside the Beijing railway station during the Spring Festival travel rush following the eight-day Lunar New Year holiday, in Beijing, China. Photo: Reuters

 

China’s tourism revenues for the Lunar New Year holidays soared this year and beat pre-Covid levels, bringing some respite to the country’s deflation-wary policymakers.

Domestic tourism spending jumped by 47.3% to 632.7 billion yuan ($87.96 billion) from the same holiday period in 2023, data by China’s Ministry of Culture and Tourism showed on Sunday.

A longer-than-usual break — lasting eight days, instead of the usual seven — boosted overall spending, as did a boom in domestic and international trips.

 

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Compared to the 2019 Lunar New Year holiday before the Covid pandemic struck the country, domestic tourism spending rose 7.7% and domestic trips increased 19%, according to the tourism ministry data.

The total entry-exit trips during the holiday also returned to 90% of the 2019 levels, data from the National Immigration Administration showed.

 

Temporary relief

The number of domestic trips made during this year’s holiday grew by 34.3% from a year ago, totalling 474 million.

For international travels, China witnessed around 13.52 million inbound and outbound trips during the holiday, growing by 2.8 times from the same holiday period last year, according to the immigration administration’s data showed.

Known as the world’s largest annual migration, the Lunar holiday is traditionally the time hundreds of millions of Chinese return to their hometowns by air, train or road to reunite with family members.

Since the onset of the pandemic and up until last year, that migration was severely hit by Beijing’s strict pandemic protocols. Even as domestic travel picked up as the economy open up, the surging infections still cast a shadow on holiday travel in 2023.

While the boom this year will offer some relief to Chinese policymakers, the sustainability of the tourism boost remains uncertain.

The world’s second-largest economy has been facing deflationary risks, weak consumer demand, and persistent youth unemployment. A downturn in the property sector — a major driver of employment — has further taken a toll on demand.

On Sunday, China’s central bank left a key policy rate — the borrowing cost of the one-year MLF loans — unchanged amid the uncertainty around the timing of an easing by the US Federal Reserve.

Beijing’s decision came as any aggressive monetary movement risks reviving depreciation pressure on the Chinese currency and capital outflows.

 

 

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  • Reuters, with additional editing by Vishakha Saxena

 

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Vishakha Saxena

Vishakha Saxena is the Multimedia and Social Media Editor at Asia Financial. She has worked as a digital journalist since 2013, and is an experienced writer and multimedia producer. As a trader and investor, she is keenly interested in new economy, emerging markets and the intersections of finance and society. You can write to her at [email protected]