Holiday consumption reflects the vigor of China's domestic demand

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

During this year's May Day holiday, China's consumer market further unleashed strong vitality. According to the estimation of the Data Center of the Ministry of Culture and Tourism, during the five-day holiday, 314 million domestic trips were made across the country, a year-on-year increase of 6.4 percent; the total spending of domestic tourists reached 180.269 billion yuan, a year-on-year increase of 8.0 percent. The "double boom" in travel and consumption not only ignited the holiday economy but also enabled people to see the broad depth and massive potential of China's economic development. At a time when the global economic growth is slowing down and geopolitical risks are intensifying, demonstrating the vitality of China's domestic demand in the economy is particularly precious.

Currently, the external environment faces many challenges. The pace of global economic growth has slowed down. Trade protectionism and unilateralism are on the rise and the international trade environment is complex and volatile, with an increasing number of unstable and uncertain factors. In such a general environment, China's economy has also been impacted to a certain extent. The resistance to exports has increased and the instability of external demand has posed more challenges to economic growth.

Against this backdrop, the importance of expanding domestic demand is self-evident. Domestic demand is the fundamental driving force for China's economic development. For a large developing country with a population of more than 1.4 billion like ours, expanding domestic demand is an effective way to cope with external shocks and stabilize economic operations and a long-term strategy to enhance strategic initiative. It is a practical need to meet people's aspirations for a better life, an active choice to give full play to the advantages of a super-large market. Responding to profound changes in the international environment is an inevitable requirement and a key support for promoting economic circulation with higher efficiency.

In order to expand domestic demand and boost consumption, the state has introduced a series of policies and localities have also actively responded by introducing key measures, achieving remarkable results. At the policy level, various measures, such as increasing direct fiscal investment in terminal consumption and enhancing social security, have been adopted to promote the stable growth of residents' income. This includes continuously optimizing consumption promotion policies, improving relevant systems, strengthening the consumption environment, intensifying and expanding the "two new" policies, allocating more funds, incorporating more consumer goods into the support scope and streamlining the subsidy distribution process. In terms of cultural and tourism consumption, various regions and departments have promoted the accelerated integration of tourism with culture, sports, etc., and launched personalized, diversified, and high-quality products and services to stimulate the development vitality of the cultural and tourism market.

In promoting commodity consumption, localities have seized the May Day consumption peak season and issued policies to accelerate the trade-in of consumer goods. Shanghai has further increased its support for vehicle replacement and renewal, expanding the subsidy scope to used vehicles with out-of-town license plates. Many automobile stores have seen many customers. During the May Day period, Ningxia held 24 trade-in themed activities and the subsidy funds for the trade-in of consumer goods during the May Day holiday will be no less than 40 million yuan. Driven by the policies, the sales of green household appliances have been booming. According to the data of Kuaishou E-commerce, various green and energy-saving products sold well in the first two days of the May Day holiday, among which the sales of air conditioners, refrigerators, floor cleaners, steam cleaners, etc. increased significantly.

Local governments have also made great efforts to create consumption scenarios and optimize services. Many places have lowered the consumption threshold by extending the opening hours of scenic spots, issuing cultural and tourism consumption coupons and launching free shuttle buses; the widespread application of technologies such as artificial intelligence and lighting technology has led to the continuous emergence of new business forms such as immersive performances and intelligent guided tours, injecting new vitality into traditional culture and tourism.

The consumption data and market performance during the May Day holiday clearly demonstrate the huge vitality of the Chinese market. In terms of the consumption structure, not only does traditional consumption in tourism, catering, etc. continue to be booming, but emerging consumption forms such as green consumption, digital consumption and experiential consumption are showing a rapid growth trend. In terms of the consumption region, in addition to the traditional consumption hotspots in big cities, the orders for tourism in counties have increased significantly and the sinking market is becoming a new growth pole of consumption. Expanding the consumption structure and region demonstrates China's domestic demand market's breadth, depth and multi-level potential.

The stability of China's economy is of great significance to the world economy. Its stable growth has made important contributions to the global economic recovery, especially in maintaining the stability of the global industrial chain and boosting the confidence of the international market. China's huge market size and continuously growing consumption demand also provide a broad development space for global enterprises.

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