China's 8-Day Golden Week Approaches... Will It Be a Turning Point for Economic Recovery?

There is growing anticipation within China that the upcoming National Day holiday starting on the 29th could serve as a turning point for the sluggish economic trend.

On the 17th, China's state-run Global Times (GT) reported that consumption could gain momentum during the eight-day National Day holiday from the 29th of this month to the 6th of next month. According to Chinese online travel platform Qunar, as of the 15th, domestic bookings for popular hotels during the holiday period surged by 514% compared to pre-COVID-19 levels.

China Railway sold 22.88 million train tickets on the first day of Golden Week ticket reservations on the 15th, marking the highest daily sales volume ever recorded. The total number of railway trips during the entire holiday period is expected to reach 190 million, significantly surpassing the 138 million trips recorded in 2019.

[Image source=Yonhap News]

On the same day, the Civil Aviation Administration of China (CAAC) announced it is preparing to handle an average of 1.96 million domestic air passengers daily during the holiday period. This represents a 17% increase compared to the same period in 2019. Citing pre-sale data, the CAAC estimated that over 21 million travelers will board domestic or international flights during the holiday.

The pace of recovery in outbound travel is also rapid. The online travel agency Trip.com reported that searches for outbound flights during the holiday period have recovered to 100% of the 2019 level. Major search destinations include Thailand, Korea, the United States, the United Kingdom, and Australia. Due to the recovery in demand, prices are also rising. As of the 13th, the average price for economy class tickets during the holiday period was 1,133 yuan (approximately 206,557 KRW), up 32.7% compared to the 2019 holiday period.

Chinese experts expect that consumption recovery and additional government stimulus policies will further improve economic indicators in September. Jiang Yi, Associate Dean of the School of Leisure Sports and Tourism at Beijing Sport University, told GT, "This holiday tourism boom will be a strong catalyst for China's economic recovery," adding, "Not only will travel exceed pre-COVID-19 levels, but recent stimulus measures will also boost consumption."

Wang Qing, a researcher at Dongfang Jincheng Macroeconomic Research Institute, predicted, "Along with various local efforts to optimize the consumption environment, consumption coupons and subsidies will be issued on a larger scale, and taxes and fees related to durable goods consumption such as automobiles, electronics, and furniture will be further reduced." Wang forecasted, "Strong and targeted policy measures will flow into the real economy, leading to overall improvements in domestic macroeconomic indicators such as consumption, investment, and manufacturing in September."

Earlier, on the 15th, China's National Bureau of Statistics announced that industrial production in August increased by 4.5% year-on-year, significantly exceeding the previous month's figure (3.4%) and the forecast (4.0%). Retail sales during the same period rose by 4.6% year-on-year, also surpassing the previous month (2.5%) and the forecast (4.6%).

Meanwhile, the People's Bank of China, the country's central bank, is set to decide on the possible cut of the Loan Prime Rate (LPR), which effectively serves as the benchmark interest rate, on the 20th. The market expects the LPR to be lowered to more actively stimulate the recovering economy. Last month, the People's Bank of China cut the one-year LPR by 0.1 percentage points but kept the five-year LPR, which is linked to mortgage loans, unchanged at 4.20%.

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