Spring Festival puts spotlight on China’s thriving economy, gathering momentum for accelerated recovery in Year of Dragon
Published: Feb 08, 2024 03:16 PM


As the bustling Spring Festival travel rush builds up, China is gearing up for the Year of the Dragon. Throngs of people are queuing up at railway stations to return home, while local markets across the country are packed with crowds stocking up for the festival. As a new wave of consumption fervor sweeps the nation, the world's second largest economy is gathering momentum for an accelerated recovery in 2024.

The Spring Festival, China's most important traditional holiday, symbolizes reunion, joy, and new beginnings. People immerse themselves in the joyful atmosphere of family reunions, while envisioning the new year ahead.

Chinese President Xi Jinping extended Spring Festival greetings to all Chinese at a reception in Beijing on Thursday. In the past year, China's economy exceeded 126 trillion yuan ($17.74 trillion), with a record high total grain output, and overall stable employment and prices. Looking globally, China remains a standout performer, he said.

Analysts noted that despite emerging headwinds, the unwavering strength and vitality of the Chinese economy remain unchanged. The bustling start to the Year of the Dragon will pave the way for economic development throughout the new year.

The eight-day holidays are expected to become an "unprecedented" peak season for consumption, thanks to the unleashing of the country's huge spending power, as well as a slew of supporting measures from localities to spur holiday spending, they said.

"I had planned to go skiing with my friends in Chongli, North China's Hebei Province, but had to abandon the idea since we didn't get tickets for the return trip. Tickets sold out as soon as they were released," a white-collar worker based in Beijing surnamed Hou told the Global Times on Thursday.

Following the 12.965 million passenger trips made nationwide by rail on Wednesday, the rail system maintained high-volume operations on Thursday, with an estimated 12.5 million passenger trips expected to be made. An additional 1,900 passenger trains were arranged for operation on the day, according to data sent to the Global Times by China Railway.

Countless Chinese people are familiar with the frenzy of booking tickets during the Spring Festival travel rush. The fervent demand for travel has been fully unleashed, with many not only returning to their hometowns for the festival but also opting for family trips to enjoy the precious eight-day vacation time.

China is expected to see 9 billion passenger trips during the ongoing travel rush, likely hitting a new high, the Ministry of Transport forecast.

In addition to the unparalleled travel surge, Chinese people are also seen holding long shopping lists, simultaneously placing orders online while squeezing into markets for bargain hunting.

Several e-commerce platforms have launched "Non-stop Shopping" campaigns for the holiday, with courier companies also continuing their services uninterrupted, ensuring smooth shopping throughout the holiday period.

Offline supermarkets are also going all out to prepare for promotional events.

"Wumart has launched a number of promotional activities, and we expect that during the upcoming holidays, supply will be increased by more than 30 percent compared with the previous month," an employee from the chain supermarket in Beijing told the Global Times.

Major shopping malls, supermarkets, and online platforms all welcomed the sales peak. In late January, data from the Ministry of Commerce (MOFCOM) showed that retail enterprises' sales rose by 19.9 percent from a month earlier. In January, the country's online retail sales increased by 20 percent year-on-year.

"This year's Spring Festival holidays will undoubtedly be the hottest season of consumption since the pandemic," Cao Heping, an economist at Peking University, told the Global Times on Wednesday.

Photo:Chen Xia/GT

Photo:Chen Xia/GT

Strong locomotive

Behind the bustling consumption activities lies the robust policy support from governments at all levels, through measures such as issuance of consumer vouchers, discount promotions and organization of shopping festivals.

For instance, the Cultural and Tourism Ministry on Tuesday said that it will issue consumption coupons worth over 600 million yuan, which can be used in sectors such as entertainment, catering and accommodation for Chinese citizens during the Spring Festival holidays.

At the tone-setting Central Economic Work Conference held in Beijing in December 2023, Chinese leaders stressed the need to expand domestic demand, noting that efforts should be made to stimulate consumption with potential.

"As an important driving force for economic growth, the prosperity of consumption directly mirrors the vibrancy of the market and the overall health of the economy. It also shows that the Chinese government's policies in promoting consumption and expanding domestic demand have achieved positive results," Wang Peng, an associate researcher at the Beijing Academy of Social Sciences, told the Global Times on Thursday.

In addition, some foreign media may attempt to paint a negative picture of the Chinese economy, but the prosperity of the consumer market is an indisputable fact. This proves the resilience and potential of the Chinese economy and demonstrates the Chinese government's ability to maintain market stability and promote economic development, Wang noted.

Over the past year, China has seen a stable rebounding in its consumption sector. Final consumption contributed 82.5 percent of overall GDP growth, while retail sales set a new record of 47.15 trillion yuan, official data revealed.

Tian Yun, a Beijing-based veteran economist, told the Global Times that there is still great potential for household consumption, and the support policies will help optimize the consumption environment and improve consumption quality, which will further enhance consumer confidence, laying the foundation for the long-term healthy development of the market.

Looking ahead, Tian noted that the Spring Festival consumption boom has made a good start and will be a strong driver for the GDP growth in the first quarter of 2024, with the total retail sales expected to grow 6 to 8 percent on a yearly basis.

Cao noted that after being pulled up by the holiday effect, the country may eye economic growth of over 5.2 percent year-on-year.

"The excellent performance in holiday consumption will have multiple effects, which will not only boost domestic economic rebounding, but also share the development dividends with other countries, especially those that rely on the tourism industry," Wang noted.

According to a report by China Media Group, the Thai Prime Minister's Office said on Monday that Thailand will welcome a large number of international tourists during the period of February 4 to 16, which coincides with the Chinese New Year holidays. Thailand is preparing to receive about 177,000 Chinese tourists, who are expected to bring in 6.2 billion baht ($174 million) in tourism revenue, a year-on-year increase of 366 percent.

In an earlier interview, Steven Alan Barnett, senior IMF resident representative in China, told the Global Times that faster growth in China also has positive spillovers for the rest of the world. For example, a one-percentage point increase in growth in China would, on average, increases the level of output in other economies by 0.3 percent over the medium term. This illustrates how strong growth in China is good for the country, while also providing a welcome lift to global demand.