Year of Dragon off to a roaring start
Robust holiday consumption sets solid foundation for growth in 2024
The growing spending power of Chinese consumers, combined with government policies to support shopping, tourism and cultural events during the eight-day Spring Festival holiday, will definitely contribute to sustaining China’s economic growth this year, according to government officials and market analysts.
They said that the Spring Festival holiday, from Feb 10 to Saturday, is anticipated to be an unprecedented peak season for consumption, setting a vibrant tone for the Year of the Dragon.
Bolstered by a string of blockbuster films, Chinese cinemas, between Feb 10 and Thursday, had grossed more than 7 billion yuan ($973 million), according to the movie information live tracker Beacon.
In addition, major tourist sites across China had received 123 million tourist trips since the start of the 2024 Spring Festival travel rush, representing a 22.8 percent increase compared with the previous year, China Media Group reported on Tuesday.
The strong start is expected to lay a solid foundation for economic growth in 2024, despite emerging challenges such as an aging population and reduced external demand.
Wu Fuxiang, director of the department of industrial economics at Nanjing University in Jiangsu province, said that consumption reflects economic growth, and the robust consumer spending during the Spring Festival holiday points to the ongoing improvement of the Chinese economy.
The uptick in consumption is expected to contribute to China’s GDP growth in the first quarter, and will directly benefit related sectors such as retail, logistics, tourism and manufacturing, said Nie Pingxiang, a researcher at the Beijing-based Chinese Academy of International Trade and Economic Cooperation.
Nie said that the expansion of these industries will, in turn, stimulate the growth of other sectors, creating a positive feedback loop along the industrial chain.
With electric cars becoming more popular among consumers in rural China, and an increasing number of people opting to travel to domestic as well as international destinations for cultural, artistic and sports tours, new types of consumption have flourished in China in recent years, becoming key drivers of consumption growth, said Sheng Qiuping, vice-minister of commerce.
These new types of consumption are empowered by digital technologies and represent green and healthy choices, Sheng said. He added that the government will introduce a raft of measures this year, such as stimulating the purchases of vehicles and household appliances, to boost consumption.
Local governments across China are providing more than 600 million yuan in consumer discounts to promote cultural and tourism consumption during the Spring Festival holiday, according to the Ministry of Culture and Tourism.
The discounts can be used for a wide range of experiences, including performances, scenic areas, local delicacies, hotels and homestays, said Miao Muyang, head of the ministry’s department of industrial development.
During the 40-day Spring Festival travel period, which began on Jan 26, the Ministry of Transport estimated that a total of 9 billion passenger trips will be made. The vast flow of travelers will inject vitality into consumption and the national economy.
Dai Bin, president of the Beijingbased China Tourism Academy, said that the Spring Festival holiday has also seen a significant surge in outbound travel, as visa-free policies for Chinese tourists to popular destinations such as Singapore, Thailand and Malaysia have made international travel more accessible and convenient.
The positive momentum will offset the negative impacts of other economic factors, boosting market confidence and attracting foreign investment, said Sang Baichuan, dean of the Institute of International Economy at the University of International Business and Economics in Beijing.
Belinda Wong, CEO of Starbucks China, said that the US coffee giant plans to operate 9,000 stores on the Chinese mainland by 2025, following the achievement of surpassing 7,000 stores in late January.
Also upbeat about the Chinese market is Jerome Cottin-Bizonne, CEO for China at Pernod Ricard, a French spirits and wine group, who said the company will expand investment in its brands in China this year.
China’s total retail sales of consumer goods, a major indicator of the country’s consumption strength, climbed 7.2 percent yearon-year to reach 47.15 trillion yuan in 2023, data from the Ministry of Commerce showed.