China's Tourism Expenditure Surpasses Pre-Covid Levels during Lunar New Year

According to official data, tourism spending in China during the Lunar New Year surpassed pre-Covid levels. Domestic tourism spending reached 632.7 billion yuan ($87.96 billion), a 47% increase compared to the same holiday period last year. This surge in spending comes after years of pandemic-related lockdowns and restrictions that were lifted in early 2023. The longer duration of the holiday also contributed to these figures. Throughout the eight-day break, a total of 474 million domestic trips were taken, marking a 34% increase from last year and a 19% rise from pre-pandemic levels in 2019. Unfortunately, detailed information regarding specific spending categories was not provided. However, analysis based on the official figures indicates a decrease of approximately 9.5% in average spending per trip compared to 2019. This suggests a prevalent phenomenon known as "consumption downgrading," as noted by analysts from Goldman Sachs. The Lunar New Year, also known as the Spring Festival, is recognized as the largest annual migration in the world. Traditionally, hundreds of millions of people in China return to their hometowns to reunite with family members or visit tourist destinations across the country. However, due to the pandemic, major celebrations were canceled, and travel was restricted. The increase in Lunar New Year spending brings some positive news to China's second-largest economy, which faces various challenges. These challenges include a property market crisis, weak exports, concerns about deflation, and falling consumer prices. Additionally, data released on Sunday revealed that foreign businesses' investment in China last year had declined to the lowest level since 1993, according to the State Administration of Foreign Exchange.