Not-so-golden years… As spending continues to sputter in China postpandemic, the gov’t looked to its annual Golden Week holiday to herald the country’s economic comeback. But that didn’t exactly happen. After eight days of national OOO concluded over the weekend, China’s gov’t shared data that showed tourism and spending came in below its expectations.
Staycation: 826M people traveled domestically in China during Golden Week, spending more than $100B — that’s more total $$ than in 2019, but less per traveler. Int’l travel to and from China recovered to 85% of 2019 levels.
“For Sale” signs: Compared to last year, home sales declined during the week known for real-estate dealmaking as property prices continue to plummet. Chinese stocks dipped on all the weaker-than-expected data.
Postpandemic problems… China’s economy was expected to come roaring back after the gov’t lifted its zero-Covid restrictions that essentially shuttered business. But the reboot has been more on pace with a dial-up IBM than a zippy new Mac. The country’s GDP grew less than 1% in the second quarter, showing slowing momentum from the first quarter’s sluggish 2.2% as real-estate values plunged and consumers spent conservatively. US industries that rely on spending from Chinese tourists (like: travel, luxury) have lamented the slow recovery.
A slow comeback is still a comeback… Golden Week’s weak data may be a sign that China’s economic recovery is shaped less like a V and more like a checkmark in progress. While spending is ticking up, analysts say pandemic financial habits may stick around, and that the gov’t needs to roll out more stimulus measures. Heads up: China’s Q3 GDP is expected next week, which could signal just how long the tail on this checkmark-shaped recovery might be.