China's Lunar New Year Travel Activity and Spending Surges Above Pre-Pandemic Levels

China's Lunar New Year Holiday Travel and Spending

Overview

The Lunar New Year holiday in China witnessed a significant surge in travel and spending, with 474 million domestic trips made during the festival, marking a 34.3% increase from the previous year. Tourists spent 632.7 billion yuan ($87.95 billion) on trips, indicating a substantial 47.3% jump in expenditure.

Analysis

The strong data reflects a concerted effort by policymakers to enhance domestic consumption. However, the sustainability of this trend remains uncertain. Despite the positive figures, analysts caution against overinterpreting the high year-over-year growth rates, as they are partly influenced by last year's low base due to the pandemic.

The tourism sector's remarkable performance led to a notable rise in China stocks as trading resumed after the holiday closure. Market participants also anticipate additional stimulus measures from Chinese policymakers to bolster the economy and potentially increase consumer spending.

The People's Bank of China held a key policy rate steady, while investors contemplate the timing of potential monetary policy adjustments by the U.S. Federal Reserve.