Visitors near Yuyuan Bazaar in Shanghai, China, Sunday, Feb. 11, 2024.
Raul Ariano | Bloomberg | Good pictures
China's travel activity and spending rose above pre-pandemic levels during the Lunar New Year holiday, a sign that consumption is improving in the world's second-largest economy.
About 474 million domestic trips were made during the eight-day festival, a 34.3% increase over the previous year. For published data of the country Ministry of Culture and Tourism on Sunday.
Tourists spent nearly 632.7 billion yuan ($87.95 billion) on domestic holiday trips, an increase of 47.3% year-on-year, the data showed.
State broadcaster China Central Television reported It quoted the ministry as saying domestic travel represented a 19% rise over the same period in 2019, while spending rose 7.7%.
The strong data comes at a time when policymakers in China are scrambling to boost domestic consumption as the country faces deflationary pressures.
Mainland China saw 3.6 million tourist departures and 3.23 million tourist arrivals over the holidays, according to the ministry, as reciprocal visa-free travel with some countries accelerated the recovery in outbound and inbound travel over the holidays.
The Lunar New Year is China's most important holiday and is often considered a key gauge of consumer appetite in the country.
However, with tourism revenue per trip still below pre-pandemic levels, the sustainability of travel remains uncertain.
“While we see some strength in the data, we urge market participants to exercise caution,” Nomura's analysts wrote in a client note, highlighting that the figures reflect consumer demand as it is the first New Year's holiday. Unaffected by pandemic-related factors since 2019.
“When interpreting the significant year-on-year growth rates, we must take into account the very low base from last year during the height of the Covid 'exit wave',” Nomura said.
China stocks rose on Monday, led by the tourism sector, as trading resumed after a week-long shutdown.
Market participants are watching for more stimulus measures from Chinese policymakers to support the economy and boost spending this year.
The People's Bank of China kept a key policy rate steady as expected on Sunday, while investors reassessed when the U.S. Federal Reserve will start easing its monetary policy this year.
A delay in rate cuts could limit Beijing's room to navigate its own policy, as US devaluation is good for the yuan.
Zhang Qingchang, deputy governor of the People's Bank of China, said earlier this month that the country is encouraging banks and local businesses to accept foreign bank cards and is considering other measures to make mobile payments even easier for international visitors.
— CNBC's Evelyn Cheng, Clement Tan contributed to this report
