China holiday spending slumps as consumer demand in Asia slows


The weak spending figures spell bad news for China's consumer recovery. - Bloomberg

BEIJING (Bloomberg): Chinese holidaymakers cut back sharply on travel and spending during the National Day break this week as strict Covid rules discouraged movement, while signs of a consumer slowdown across Asia mount.

Tourism revenue declined 26% to 287 billion yuan (US$40.3 billion) over the week-long holiday from a year ago. Compared with pre-pandemic levels in 2019, revenue was down nearly 56%, and even worse than last year’s 40% decrease from 2019 levels, according to figures from the official social media account of the Ministry of Culture and Tourism.

Roughly 422 million trips were taken, down 18% from last year and 39% from 2019 levels.

The number of trips taken via railways, roads, water and planes during the break is also estimated down 36% from last year, state broadcaster China Central Television reported Friday (Oct 7), with the daily average representing a decrease of 58.1% from 2019.

Despite recent calls to stimulate domestic spending, Covid curbs are still commanding the narrative for consumption. Air tickets this season were the cheapest in five years, and on average 12% lower than prices during Golden Week last year, according to local media, citing figures from booking site Qunar.com.

Cinema tickets also plunged, with sales reaching just 1.4 billion yuan ($197 million) as of 1pmm. local time Friday, according to online ticketing service provider Maoyan Entertainment. That’s less than a third of the box office for the full seven-day break last year, and also much worse than the nearly 4 billion yuan earned in 2020.

The weak spending figures spell bad news for China’s consumer recovery at a time when economic growth risks are mounting.

The slump in the property market shows no signs of easing, global demand for Chinese goods is slowing and the currency is plunging. Several economists say Beijing is unlikely to ease its Covid Zero policy until after March next year.

The deterioration in the world’s second-biggest economy coincides with a broader downturn across Asia in sectors from electric cars to memory chips and online shopping, and may indicate more weakness to come.

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China , holiday , consumer , spending

   

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