Chinese spending jumps over long holiday weekend, tops pre-Covid level

By Reuters April 8, 2024 | 06:36 pm PT

Visitors pose for pictures at the Badaling section of the Great Wall in Beijing, 2023. Photo by Reuters

Chinese travelers spent $7.5 billion domestically during the recent Tomb Sweeping holiday, government data showed, with analysts saying the uptick was a sign that consumer confidence was strengthening, boding well for the sluggish economy.

Per capita spending during the April 4-6 holiday, when the Chinese traditionally honor their ancestors by visiting tombs usually located in their home towns, was 435 yuan ($60.14), or about 101.1% of the spending recorded during the holiday five years ago, according to Sinolink Securities.

Chinese spent more per capita during that long weekend than any other holiday period since China lifted Covid-19 restrictions in late 2022, analysts said.

"The recovery of per capita spending is better than expectations," the brokerage said in a research note on Sunday, adding that average tourism spending during the 2024 New Year holiday and Spring Festival in February are respectively 96.5% and 90.5% of 2019 levels.

Other analysts said the spending data could be a turning point, as consumption in China has struggled to recover since the lifting of Covid curbs, weighed down by a property market downturn, high youth unemployment and concerns over job security amid an economic slowdown.

"Our sense is that there is a small but growing sentiment within white collar jobs that the market situation is improving and this is also leading to greater willingness to spend," said Ben Cavender, managing director at Shanghai-based China Market Research Group.

He said some companies were thinking about how to grow their business in China again after years of holding off on investing, which was helping sentiment to improve.

In February, average spending per trip during the Lunar New Year holiday, one of the biggest holidays, fell 9.5% versus 2019 according to Reuters calculations based off government data, prompting analysts to say that "consumption downgrading" was still happening.