New Year's Day holiday sees China's economic vitality

Editor's note: Liu Chunsheng, a special commentator on current affairs for CGTN, is an associate professor at the Central University of Finance and Economics in Beijing. The article reflects the author's opinions and not necessarily the views of CGTN.

As the festive lanterns of the 2024 New Year's Day holiday fade, the performance of China's economy during this period offers a glimpse into the broader economic landscape of the year ahead. Traditionally a time of increased consumer spending, travel, and production pauses, the New Year's Day holiday serves not only as a barometer for consumer confidence but also sheds light on the underlying resilience and adaptability of China's economic mechanisms in the face of both domestic and international headwinds.

Preliminary data indicates a robust start to 2024. Monitored enterprises in Beijing, including department stores, supermarkets, specialty franchises, restaurants, and e-commerce, achieved sales of 2.5 billion Chinese yuan ($352.3 million). Restaurant consumption saw a year-on-year increase of 27.9 percent. Beijing's 60 key commercial areas welcomed 22.2 million visitors, marking a 40.5 percent increase compared to last year.

The Chongqing Municipal Commission of Commerce reported that during the New Year's Day Holiday of 2024, the total market consumption in Chongqing grew by 9.8 percent compared to the same period last year and increased by 13.2 percent compared to the same period in 2019.

In Guangxi Zhuang Autonomous Region, monitoring data indicated that during the holiday, 208 key retail and catering enterprises achieved a year-on-year sales increase of 16.4 percent, with retail businesses up by 16.2 percent and catering businesses by 39.2 percent. The data signals renewed vigor in domestic consumption.

Moreover, the travel industry, a key indicator of disposable income levels and consumer sentiment, bounced back with a hike in domestic tourism revenue compared with the same period last year. According to the Data Center of the Ministry of Culture and Tourism, over the three-day New Year's Day holiday, domestic tourism in the country saw 135 million trips, a year-on-year increase of 155.3 percent; domestic tourism revenue reached 79.7 billion yuan ($11.1 billion), a year-on-year increase of 200.7 percent.

The latest report from Chinese travel agency company Trip.com shows that domestic New Year's Eve tourism orders increased by 168 percent year-on-year, and outbound tourism orders increased by 388 percent. In terms of tourism consumption such as high-end resort hotels and customized tours, the average spending per tourist has risen to various extents.

According to the National Film Bureau, the total box office during the holiday reached 1.5 billion yuan ($215.1 million), setting a new record for the period. The number of moviegoers was 36.6 million, with domestic films accounting for 1.4 billion yuan ($268.6 million) of the box office revenue, representing 92 percent of the market share.

From different perspectives, service consumption continues to recover, with industries such as tourism, catering, and entertainment showing strong growth. New trends and innovative practices have become hotspots in consumption, with emerging technologies like the metaverse, virtual reality, and augmented reality gradually entering the consumer market and gaining popularity among young people.

At the same time, concepts of environmental protection, sustainability, and personalization are also influencing market trends, with related products and services attracting more and more consumer attention.

The New Year's Day holiday reflects China's economic vitality in 2024. With implementation of the employment priority policy and reforms in the income distribution system, the employment situation is continuing to improve, and household income is steadily increasing, which will enhance people's willingness to consume.

Meanwhile, multiple policies such as the increase in the special additional deductions for individual income tax and the reduction of existing housing loan rates are expected to support the expansion of resident income and enhance consumption capacity. Various departments and regions will firmly grasp consumption as a strategic cornerstone, continuing to introduce policy measures to fully unleash consumption potential.

China is also cultivating and expanding new types of consumption, vigorously developing digital, green, and health consumption, and cultivating new growth points such as smart home appliances, cultural and entertainment tourism, sports events, and trendy domestic products.

China's economic landscape in 2024 is poised for a fine balance of opportunities and challenges. On the one hand, economic recovery measures are yielding fruits with increased consumer confidence and government policies aimed at boosting domestic consumption and technological self-sufficiency, such as those in the 14th Five-Year Plan. On the other hand, China is still navigating headwinds including geopolitical tensions and the necessity to transition from high-speed to high-quality growth in order to achieve environmental targets.

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