1 Billion Missing in China... National Day Holiday Sees Sharp Drop in Tourists and Tourism Revenue

Number of Tourists Down 100 Million to 514 Million Last Year, Tourism Revenue Also Decreased by 12 Trillion Won
Concerns Raised Over Potential Decline in Growth Rate in Q3-Q4 Due to Power Shortage and Other Adverse Factors

[Asia Economy Beijing=Special Correspondent Jo Young-shin] The number of domestic tourists during China's National Day holiday (October 1?7) fell significantly short of last year's level. It appears that movement restrictions due to the COVID-19 Delta variant and power shortages had an impact. The National Day holiday serves as a barometer for China's domestic consumption market.

According to Chinese media including the state-run Xinhua News Agency and People's Daily on the 8th, the number of domestic tourists during the National Day holiday was tentatively estimated at 515 million person-trips. Last year, the Ministry of Culture and Tourism of China announced that the number of tourists during the National Day holiday was 618 million. The tally shows a decrease of about 100 million.

Tourism revenue also dropped sharply. This year's National Day holiday tourism revenue was surveyed at 389.06 billion yuan (approximately 71.7893 trillion KRW). This is a decrease of 65.27 billion yuan (12 trillion KRW) compared to last year's 454.33 billion yuan. This year's tourism revenue is at 59.9% of the pre-pandemic level in 2019, a decline from last year's 69.9%.

Xinhua News Agency explained that the resurgence of COVID-19 in some provinces and bad weather prevented medium- and long-distance tourism demand from fully recovering.

Since China's domestic market is a pillar of its economy, this is likely to negatively affect the fourth quarter's gross domestic product (GDP) and potentially drag down the annual growth rate. Above all, the power shortage that began last month is widely expected to first impact the third quarter GDP.

According to a recent survey conducted by the Nihon Keizai Shimbun targeting 29 Chinese economic experts on China's economic outlook, the average forecast for China's GDP in the third quarter (July?September) is 5%. Among 22 valid respondents, 14 predicted growth in the 5% range, while 6 experts forecasted growth in the 4% range. Experts from Goldman Sachs, Barclays, and Morgan Stanley even anticipated negative growth compared to the previous year.

The outlook for the fourth quarter (October?December) is also not optimistic. The newspaper reported that a considerable number of respondents believe that due to the power shortage, China's economy may grow less than 5% year-on-year in the fourth quarter.

A specialist from the international credit rating agency Moody's pointed out, "The Chinese leadership's excessive decarbonization policies could backfire on manufacturing and retail sectors," adding, "Power supply restrictions and shortages are affecting China's industrial activities."

Earlier, the international investment bank Goldman Sachs lowered its growth forecast for China this year from 8.2% to 7.8%, citing the power shortage.

Meanwhile, People's Daily prominently reported on page 3 that China's fundamentals remain solid, citing a 12.7% year-on-year growth in GDP in the first half of the year, and analyzed that the international community is making overly pessimistic forecasts about China's economy.

This content was produced with the assistance of AI translation services.