Holiday consumption mirrors China’s economic vitality in new year

This photo taken on January 23, 2023 shows people in a cinema in Xi’an City, northwest China’s Shaanxi Province. [Xinhua/Li Yibo]

BEIJING — China reveled in the festive hustle and bustle as people celebrated the Lunar New Year of the Rabbit with strong emotions from consumers.

Data from the State Tax Administration showed that during the week-long holiday that ended on Friday, sales revenue for China’s consumption-related sectors rose 12.2 percent compared with last year’s Spring Festival holiday, which ran from January 31 to February 6.

The figure saw an average annual growth of 12.4 percent compared with the Spring Festival holiday in 2019, the pre-COVID-19 period, according to the data.

Many people returned to their hometowns for family reunions during the first Spring Festival holiday after the country improved its anti-virus response, while others took long-awaited trips for leisure. During the holiday, people also flocked to cinemas, restaurants, and various kinds of tourist attractions, to satisfy their pent-up consumer desire.

Cinema is back

Chinese cinemas welcomed crowds of moviegoers with a batch of highly anticipated films showing during this year’s Spring Festival holiday. In this period, 129 million tickets were sold, generating huge revenue of 6.76 billion yuan (about 998.49 million dollars), up 11.89% over the same period in 2022.

Earnings made this year’s holiday the second-highest so far, sending a strong signal of a strong recovery for China’s culture and tourism industry this spring.

Rao Shuguang, president of the China Film Critics Association, said the film frenzy made him feel that Chinese films would make a “new beginning towards a better future” after being hampered by the COVID-19 virus for years.

In this aerial photo, tourists visit the Ice-Snow World amusement park in Harbin, northeastern China’s Heilongjiang Province, January 25, 2023. [Xinhua/Wang Jianwei]

Travelers hit the road

Like the enthusiasm for movies, the demands of leisure travel have registered exponential growth in the week-long vacation. About 308 million domestic trips were made in the period, up 23.1 percent from last year’s Spring Festival holiday and recovering to 88.6 percent from the same holiday in 2019, according to the Ministry of Culture and Tourism’s calculations.

Domestic tourism revenue reached 375.8 billion yuan, up 30 percent from the same period last year, and back to 73.1 percent in 2019.

Data from online travel agency Group showed that tourist bookings for this year’s Spring Festival holiday have increased by 4 times over the holiday period last year, with the number of inbound and outbound trips reaching new highs over the past three years.

Compared to last year’s week-long holiday, ticket sales for major local tourist attractions have more than quadrupled, according to Data from Alibaba’s travel branch, Filiji, showed orders for domestic air tickets and train tickets rose 40 percent and 80 percent, respectively, and international airline ticket reservations rose more than 4 times.

Searches for “hotel reservations” on the Alipay platform have increased 6 times this year compared to last year’s holiday, and related consumption has increased by 80%. Data from Fliggy showed that during the first four days of the holiday, domestic hotel bookings exceeded those for the 2019 Spring Festival holiday.

Specifically, the number of long-distance tours registered steady growth over this year’s holiday, with bookings for domestic long-distance tours jumping more than 500 percent, according to Fliggy.

Data from Qunar, an online travel service provider, showed that the average travel distance per capita also increased by 400 kilometers compared to last year. Guo Liqun, vice president of the company’s Big Data Research Institute, said that the large increase in the number of long-distance tourists boosted China’s tourism market during this holiday.

“The popularity of tourism in the Spring Festival is obvious to everyone,” said Shen Jianye, a senior researcher at Ctrip Research Institute. Taking this as a starting point, we believe that the confidence and consumption potential of China’s tourism will take off rapidly. The market is expected to witness a significant recovery this year.”

People enjoy local food in Nanming District, Guiyang, southwest China’s Guizhou Province, January 23, 2023. [Xinhua/Tao Liang]

Long queues outside restaurants

China’s catering business also saw a steady recovery in the week-long holiday, driven by people’s growing enthusiasm for travel and family reunions.

Searches for restaurants serving feast on Spring Festival night, a notable event that features a family gathering and sumptuous dishes, are up more than 157 percent from a year ago, according to the Chinese version of Yelp, Dianping.

“I haven’t gone home during the festival in the past years,” said Nana, who works in Beijing. This year, she made reservations at a restaurant in her hometown one month before the holiday. “I would like to have dinner with my family on the Spring Festival night to celebrate the New Year well.”

According to Chinese e-commerce platform Meituan, orders for multi-person food packages at Chinese restaurants in the first six days of this holiday increased by 53% compared to the same holiday period of 2022.

Throughout the week-long holiday, hordes of people crowded outside restaurants, some having to wait hours at popular restaurants.

“The number of our waiting customers has reached 3,000 per day, and our lobster sales have far exceeded the pre-epidemic level,” said Sun Bing, general manager of Changsha Wenheyou Restaurant, a famous restaurant brand in Changsha City, central China’s Hunan Province.

Shopping fun

Strong expansion in demand for various products and services also boosted the retail market in the past holiday period. Data from e-commerce giant showed sales of life services jumped 302 percent from the same holiday period last year, and sales of rabbit-themed jewelry rose more than 10 times.

The data showed that products such as gift boxes, winter sports equipment, semi-cooked foods, home appliances and health care products also recorded rapid growth in sales.

Analysts stressed the strength of the Chinese economy in 2023, pinning their hopes on a strong recovery in consumption in particular.

China’s growth potential was unleashed by the orderly easing of movement restrictions, followed by a strong release of pent-up demand for consumption and services, according to a recent World Bank report.

Wen Bin, chief economist at China Minsheng Bank, said rising demand at home will drive the turnaround in China’s economy this year, and estimated the country’s full-year GDP growth at around 5.5 percent.

According to the Chasing Institute of International Economics, China’s per capita consumer spending is expected to grow by 8 to 12% year-on-year in 2023, while total retail sales of consumer goods will expand by 7 to 11% year on year.

“We expect China’s economic growth in 2023 to be much higher than the previous year, mainly driven by consumption,” said Robin Xing, chief China economist at Morgan Stanley.