Editor's note: John Gong is a professor at the University of International Business and Economics (UIIBE) and VP-Research and Strategy at the UIBE-Israel. The article reflects the author's views and not necessarily those of CGTN.

If anyone had any doubts about Chinese consumers' purchasing power, just take a look at hotel bookings, as well as railway and air tickets sales during the five-day Labor Day holiday. It's been reported that some 240 million trips are expected during the holiday, which will generate more than 120 billion yuan ($17.4 billion) of revenue in tourism, it has been estimated. In what we call an act of "revenge" consumption, we can point out a few highlights.

The name of the star city that has been frequently mentioned recently is Zibo, Shandong Province, which shot up to national fame literally overnight for its reputation of barbequed foods. But the real factor behind this reputation is that the local government has been working closely with restaurants to deliver top-notch customer dining experience. As a city with a population of a little less than 500,000, Zibo reckons that more than 120,000 tourists will swarm the city during the Labor Day holiday.

The city of Chengdu, in southwest China's Sichuan Province, is another place that is destined to be overwhelmed. Reports have shown that hotel bookings have increased by 20 times compared to last year. Yummy street food and picturesque natural sceneries are certainly one of the reasons why people choose this city as their preferred destination. And pandas are also a big draw that cannot be ignored. 

Many cities across the country have anticipated a tourism boom that hasn't been seen in the last three years. China National Railway Group has just projected a traffic volume of 120 million passengers over the coming week. Ctrip, a leading travel platform, has announced that train and air ticket sales have seen a 10-fold increase, while hotel bookings have jumped by 14 times.

Besides, the movie industry will make a killing during the holiday, having been ravaged by the COVID-19 pandemic for such a long time. Eighteen new movies will be screened and early bookings have already reached 150 million yuan (about $20.25 million).

All indicators show that people are indeed keen to consume, and industries like travel, entertainment, retail and restaurant will be the primary beneficiaries.

From an economic perspective, at least two conclusions can be drawn in light of the Labor Day holiday spending frenzy. First, the country will certainly see a strong GDP growth in the second quarter, in the vicinity of 7 percent according to personal estimates. If that is the case, the overall year growth target of about 5 percent is much more likely to be achieved. In fact several international financial institutions have upgraded China's 2023 growth at over 6 percent.

The strong consumption performance vindicates common belief that the government doesn't have to put forward a strong consumption-oriented stimulus package. There is no doubt that this year's growth will have to be driven by consumption and the services. But so far, the economic performance in the first quarter was largely constrained by the difficulties in the job market. Yet we know the savings at the bank has been shooting through the roof over the last three years, to the extent that the banks are even having trouble loaning them out.

Now people are starting to consume, which will help create jobs in the service sector. This will in turn improve consumption as people want to experience good service. As a result, a virtuous circle is created. It can be predicted that consumption across China will resume substantially soon. 

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