During the Chinese New Year holiday, China's retail and catering industry posted an impressive 8.5 percent increase. The holiday sparked earnings of more than 1 trillion Yuan or about $148 billion. Many economic analysts have pointed out that China may have finally withered the economic slump which the country has endured for quite a number of months now.
According to gathered data by the Ministry of Commerce, the recent spike in spending can be traced back to an increase in sales of gifts, traditional foods, local specialty projects, and electronic products. The increase in spending was also concentrated mainly over a six-day holiday period which ended on Saturday. For many years, the Chinese Lunar New Year holiday has always been touted as one of the biggest drivers of spending throughout the year.
Aside from purchases, there is also a massive spike in terms of domestic tourism all throughout the New Year holiday break. Based on recent data, domestic tourism generated more than 513 billion Yuan of revenue throughout the holiday break. This represents an increase of 8.2 percent compared to last year's numbers. Chinese domestic tourists also went up by 7.6 percent or close to 415 million. The holiday season is widely considered as the gauge used to measure China's private consumption as it is usually the time for family reunions and gift giving.
China's economic boom has hit a slight slump in 2018. The country recorded 6.6 percent growth, which is while still an impressive number it is the country's weakest pace for nearly three decades. Many analysts have noted that China's economic growth will continue to cool down until the point where the government's measures will start to stabilize the economy sometime in the middle of the year.
On Monday, China's blue-chip index went up by 1.8 percent and the consumer staple index also went up by 4 percent. An analyst from Nomura has noted that new data indicates that Chinese consumers are slightly tightening their spending habits. In a note, the analyst said, "Weak consumption during the Lunar New Year holidays in 2019 does not bode well for overall retails sales growth."
It is important to note that domestic consumers are the main source of China's economic boom over the span of several years. This has been the case starting when the country's manufacturing and trade industry has started to experience a slight hitch in growth. As such, it is important for China to continue to boost its local consumer industry.
