Published: 16:18, February 23, 2024 | Updated: 16:22, February 23, 2024
Year of Dragon off to a roaring start
By Zhong Nan

Robust holiday consumption sets solid foundation for growth this year, analysts say

Tourists enjoy the underwater wonderland at an ocean park in Wuhan, the capital of Hubei province, on Feb 13, 2024. Consumer spending during the Spring Festival holiday has set a vibrant tone for the year ahead. (HUANG FENG / FOR CHINA DAILY)

The growing spending power of Chinese consumers, combined with government policies to support shopping, tourism and cultural events during the eight-day Spring Festival holiday, will definitely contribute to sustaining China’s economic growth this year, according to government officials and market analysts.

They noted that the Spring Festival holiday, from Feb 10 to 17, has witnessed a major boost in consumption that benefited multiple businesses, setting a vibrant tone for the Year of the Dragon.

Bolstered by a string of blockbuster films, Chinese cinemas, between Feb 10 and 15, had grossed more than 7 billion yuan ($973 million), according to the movie information live tracker Beacon.

In addition, major tourist sites across China had received 123 million tourist trips since the start of the 2024 Spring Festival travel rush, representing a 22.8 percent increase compared with the previous year, China Media Group reported on Feb 13.

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The strong start is expected to lay a solid foundation for economic growth in 2024, despite emerging challenges such as an aging population and reduced external demand.

Wu Fuxiang, director of the department of industrial economics at Nanjing University in Jiangsu province, said that consumption reflects economic growth, and the robust consumer spending during the Spring Festival holiday points to the ongoing improvement of the Chinese economy.

The uptick in consumption is expected to contribute to China’s GDP growth in the first quarter, and will directly benefit related sectors such as retail, logistics, tourism and manufacturing, said Nie Pingxiang, a researcher at the Beijing-based Chinese Academy of International Trade and Economic Cooperation.

Tourists watch a dragon dance performance at the Zhengding ancient city in Shijiazhuang, north China's Hebei province, Feb 15, 2024. (PHOTO / XINHUA)

Nie said that the expansion of these industries will, in turn, stimulate the growth of other sectors, creating a positive feedback loop along the industrial chain.

With electric cars becoming more popular among consumers in rural China, and an increasing number of people opting to travel to domestic as well as international destinations for cultural, artistic and sports tours, new types of consumption have flourished in China in recent years, becoming key drivers of consumption growth, said Sheng Qiuping, vice-minister of commerce.

He added that the government will introduce a raft of measures this year, such as stimulating the purchases of vehicles and household appliances, to boost consumption.

Local governments across China provided more than 600 million yuan in consumer discounts to promote cultural and tourism consumption during the Spring Festival holiday, according to the Ministry of Culture and Tourism.

During the 40-day Spring Festival travel period, which began on Jan 26, the Ministry of Transport estimated that a total of 9 billion passenger trips will be made. The vast flow of travelers will inject vitality into consumption and the national economy. 

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The positive momentum will boost market confidence and bring in foreign investment, said Sang Baichuan, dean of the Institute of International Economy at the University of International Business and Economics in Beijing. 

Belinda Wong, CEO of Starbucks China, said that the US coffee giant plans to operate 9,000 stores on the Chinese mainland by 2025, following the achievement of surpassing 7,000 stores in late January. 

Also upbeat about the Chinese market is Jerome Cottin-Bizonne, CEO for China at Pernod Ricard, a French spirits and wine group, who said the company will expand investment in its brands in China this year. 

In 2023, China’s total retail sales of consumer goods climbed 7.2 percent year-on-year to reach 47.15 trillion yuan.