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China holiday travel surge hints at consumer spending pickup

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A resurgence in travel over China’s Lunar New Year holiday is offering some signs of a consumer spending pickup in the world’s second-largest economy as it struggles with low confidence and deflation.

More than 61 million rail trips were made in the first six days of the national new year holiday, according to official reports. That was the highest in data compiled by Bloomberg News in the last five years, and it marked a 61% increase over the same vacation period in 2023.

“The Chinese consumer is beginning to stir,” said Frederic Neumann, chief Asia economist at HSBC Holdings, adding that spending indicators had exceeded expectations. He acknowledged, though, that surpassing 2023 was a “low bar” given the country was still contending with a rampant outbreak of Covid-19 at the time.

The travel data is welcome news for an economy struggling with concerns about growth this year as the ongoing property crisis dents confidence and deflationary pressures persist. Consumer prices dropped last month at the fastest pace since the global financial crisis, adding pressure on the government to step up support. A multi-trillion dollar selloff in Chinese stocks has underscored the economic gloom.

Some initial data on road and air trips during the holiday also showed improvement over last year, Chinese state media reported. Hotel sales on Chinese e-commerce platforms surged more than 60% from a year earlier, according to media reports citing the Ministry of Commerce.

Just ahead of the holiday, Shanghai reported some 8.8 million tourists, up more than 50% year-on-year, according to state broadcaster China Central Television.The average daily consumer spending on Meituan’s online platforms during the holiday period jumped some 36% from the same period last year, according to a report from the delivery giant.

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