What’s going on?
China’s Golden Week holiday brought in less money than expected, more proof that the economy’s still far from roaring back.
What does this mean?
China’s Golden Week holiday was anticipated to showcase the country’s long-awaited recovery, with revelers splashing enough cash to give the world’s second-biggest economy a reason to celebrate. Just over 800 million domestic trips were made over the eight-day vacation that ended last Friday, bringing in $103 billion in domestic tourism revenue. Thing is, that’s only a smidgen better than the pre-pandemic total in 2019, despite this year’s celebrations lasting for one extra day. And it landed below official projections too, which had set sights on nearly 900 million trips and $107 billion in revenue. That’s a sign China’s economy as a whole is still far from fighting fit.
Why should I care?
The bigger picture: China’s Achilles’ heel.
Golden Week is a crucial period for property developers, but Chinese home sales over the period were lower this year than last. That, at a time when the government’s pouring support into the struggling sector: it’s reduced the amount of money banks need to keep on hand, slashed interest rates, and eased the requirements for home purchases. And because the state of the property market heavily influences the population’s spending habits, China will need to harden up the sector somehow. Otherwise, consumer spending will never get back to its pre-pandemic ways, depriving the economy of a critical growth engine.
Zooming out: Come fly with us.
China’s domestic travel might’ve trickled in below expectations, but it’s holding up better than international travel to and from the country. And to rub salt in the wound, the rest of the world’s proposing a toast. After four years of out-of-steam numbers, global airline capacity – that’s the number of seats available multiplied by the distance flown – is set to land above 2019’s levels this week, according to aviation analytics firm Cirium. That’s a major milestone in the $1 trillion-plus travel sector’s pandemic recovery.
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Originally Posted October 9, 2023 – Bronze Week
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