A man hangs lanterns for the festive season in Chinatown in Bangkok, Thailand, on Wednesday. The Thai government announced on Tuesday that it would declare the 2021 Chinese Lunar New Year Festival that falls on February 12 a public holiday for the first time to boost tourism. Photo: AFP

Due to the resurgence of sporadic COVID-19 cases, some Chinese cities and scenic spots announced that they will not arrange festive activities on New Year's Eve. According to the Beijing municipal government, authorities will review applications for holding major events, with the capital discouraging holding large-gatherings including temple fairs and sports gatherings during the New Year and upcoming Spring Festival holidays, media reported.

New Year's Eve celebration and parties have always been a traditional way for people to embrace the arrival of the new year, and the reduced number of large-scale public activities this time will likely have some impact on new year holiday consumption. Given the restrictions several cities and regions have imposed on public gatherings and outbound travel, we cannot rule out the possibility that the consumption levels during the New Year holiday period this year may be weaker compared with previous years.

To be clear, the Chinese economy will be fully capable of absorbing such consumption loss if the holiday economy is not as bullish as it in the past. This is because China's retail sales have maintained a continuing rising trend, as the country emerges as the first major economy to recover from the impact of COVID-19. In November, China's social retail sales climbed 5 percent year-on-year, up from 4.3 percent in October, according to data from the National Bureau of Statistics.

Moreover, China's strong growth consumption data is expected to continue into the year of 2021. The total retail sales of consumer goods are projected to grow 4 to 5 percent in 2021, according to a blue paper on the economic outlook for the next year released by the Chinese Academy of Social Sciences.

In this sense, while the upcoming year 2021 is set to have an unusual start, it won't affect the general upbeat trend across the Chinese economy.

From a global perspective, local governments around the world have also announced the cancellation of the New Year's Eve celebration in an effort to avoid social gatherings, especially in some areas where daily infections are still climbing. For these regions, the cancellation of celebration events may make some feel pessimistic about the upcoming year, but in the long run, minimizing the risk of infection exposure is still essential. Caution is still advised when it comes to organizing large gatherings in countries where new infections are increasing.