Data from various Chinese platforms reveals that the consumption during China’s traditional Lantern Festival, concluding the two-week celebration of the Chinese Lunar New Year, extended the buying fever seen during the Spring Festival holidays. The robust holiday spending, coupled with a stock market rally, marks a strong start to China’s economic growth for the year, bolstering expectations and market confidence.
The Lantern Festival, celebrated on Saturday this year, witnessed widespread participation in lantern fairs, night tours, and short-distance travel, continuing the strong consumption momentum from the Chinese New Year holidays. Booking volumes for hotels and sales of tickets for national scenic spots saw significant increases, reflecting continued consumer enthusiasm.
According to Qunar.com, as of Friday, hotel booking volumes during the Lantern Festival period increased 2.6 times compared to 2023, and Trip.com reported a 140% YoY increase in domestic travel bookings over the weekend. Online retail platform Meituan noted a 425.6% YoY surge in the search for yuanxiao, a festive sweet glutinous rice ball, and a 720% increase in the search for lantern fairs.
Experts predict that this trend indicates an upward trajectory for China’s consumption volume and quality in 2024. The Lantern Festival’s spending fever extended the momentum from the Chinese New Year holidays, which saw record travel data and holiday spending.
During the eight-day Chinese Lunar New Year holidays, domestic trips reached 474 million, up 34.3% YoY, and total tourism spending rose by 47.3% YoY to approximately 632.69 billion yuan ($87.95 billion). China’s Ministry of Commerce reported an 8.5% YoY increase in sales for key retail and catering enterprises during this year’s Spring Festival holidays.
The surge in consumer spending during the holidays is seen as a positive signal for China’s economy, refuting negative portrayals in foreign media. China’s stock market also experienced a strong rally during this period, with the Shanghai Composite Index rising for eight consecutive days, recovering losses and surpassing the 3000-point mark.
The sustained upward trend in the stock market is expected to attract more capital inflows, supporting corporate financing and stimulating economic growth in the coming months. The surge in consumption during the Spring Festival is anticipated to impact China’s GDP growth in Q1 2024 positively, setting the stage for a strong economic recovery throughout the year.
In response to economic dynamics, China’s central bank recently cut its five-year-plus loan prime rate by 25 basis points, and various pro-growth measures are being rolled out, focusing on boosting market confidence and improving efficiency. Foreign investment and foreign-funded enterprises in China have shown growth, contributing to a favorable economic outlook.
While a national GDP growth target is expected to be released in early March during the national two sessions, major provincial-level economic powerhouses, including Shanghai and Guangdong, are eyeing a growth rate of about 5% or higher.