Vibrant holiday spending spurs hope for solid, even recovery in China
China's three-day Dragon Boat Festival holiday saw booming travel and spending activity as businesses and authorities rushed to fire up the market with innovative stimulus, spurring hope for a more solid and balanced economic recovery.
China saw more than 89 million domestic tourist trips during the holiday from June 12 to 14, up 94.1 percent from last year, according to data from the Ministry of Culture and Tourism.
Tourism revenue reached 29.43 billion yuan (about 4.6 billion U.S. dollars), surging 139.7 percent from last year when the sector fell to the blows of the COVID-19 outbreak.
While the data was still below pre-epidemic levels, analysts predict recovery in the consumption market to pick up pace on a wave of spending-stimulating activities, such as tailored services to meet upgrading demand and the rollout of digital RMB red envelopes.
Data by online travel booking agency Ctrip showed total orders on its platform increased 83 percent from last year as tickets and car rental businesses exceeded the level in 2019.
"Young people have gradually become the main force driving holiday consumption, which will accelerate the expansion of new forms of tourism models from the demand side," said Xie Xiaoqing, a senior researcher at Ctrip Research Institute.
In the latest public trial run of China's digital legal tender, the Chinese capital Beijing, with a population of around 22 million, handed out 40 million yuan in digital currency to consumers in a total of 200,000 digital red envelopes, each containing 200 yuan.
The draw results were announced on June 11, the eve of the Dragon Boat Festival holiday, as a travel and spending boom was expected.
The diverse efforts to stimulate domestic demand came as recovery of the consumption sector, among the hardest hit by the COVID-19 epidemic, had lagged behind the more resilient industrial sector, prompting authorities to put more focus on deepening structural reform for balanced recovery in the long term.
China's economy grew 18.3 percent year on year in the first quarter of 2021, as strong domestic and foreign demand powered recovery from a low base in early 2020 when COVID-19 stalled the world's second-largest economy.
Though China's economy has got off to a good start this year, the central leadership stressed that the country's first-quarter data should be viewed dialectically as the recovery is still unbalanced and the foundation not solid.
To harness consumption potential, authorities are setting their sights on the less developed rural areas. Last week, 17 government agencies including the Ministry of Commerce released a plan to promote rural consumption, giving details of how logistics and infrastructure services will be improved in the rural regions.
During the Dragon Boat Festival, more than 380 million parcels had been handled in rural areas, surging 30 percent from the holiday period last year, data by the State Post Bureau showed.
Against the backdrop of regular epidemic prevention and control, the gradual improvement of county commercial and logistics distribution systems, as well as optimized supplies, will help better meet the needs of consumption upgrades and fully release consumption potential, noted Wang Yan, an analyst with the research institute under the Ministry of Commerce.