Holiday consumption market underscores new growth drivers of Chinese economy

The just-concluded 2026 May Day holiday has offered a vivid snapshot of China's booming consumer market, with both service and goods consumption logging stellar growth, pointing to robust endogenous momentum underpinning the world's second-largest economy.

Policy support sparks vitality

China has stepped up policy support to unlock the potential of the holiday economy, with targeted measures ranging from optimized vacation arrangements to trade-in incentives effectively unleashing consumption vitality.

China logged around 1.52 billion inter-regional passenger trips during the 2026 five-day May Day holiday, a 3.49% increase compared with the same period a year earlier, the Ministry of Transport said on Wednesday.

On the logistics front, between April 27 and May 3, national railway freight transport reached 80.8 million tonnes, up 1.63% month on month, while cargo throughput at monitored ports hit 278.23 million tonnes, rising 7.64% month on month.

China also saw a surge in cross-border travel during this holiday, with nearly 11.3 million entry-exit trips recorded, fueled by growing arrivals of international visitors, including those entering under visa-free policies. Daily border crossings averaged 2.26 million during the holiday that began on May 1, up 3.5% from a year earlier and peaking on May 2.

Ministry of Commerce data shows that from May 1 to 4, foot traffic and business revenue of 78 key monitored pedestrian streets and commercial districts rose 5% and 5.3% year on year, respectively.

Figures from local life services on the TikTok platform reveal that sales of hotel group purchases on the platform surged 86% year on year during the holiday, while sales of health and leisure services jumped more than 50% from pre-holiday levels.

A 2026 May Day consumption insight report released on May 5 by Meituan, a major online lifestyle platform in China, shows that driven by the combination of spring holiday and extended leave arrangements, mid-to-long distance trips of over 300 kilometers accounted for 46% of total travel orders during the holiday.

Among mid-to-long distance trips, Beijing, Chengdu, Shanghai, Chongqing, Guangzhou, Hangzhou, Xi'an, Shenzhen, Wuhan and Nanjing ranked as the top 10 most popular destinations.

"Experience-oriented consumption, through the whole-chain linkage of 'food, accommodation, transportation, travel, shopping and entertainment' and the integration of multiple formats including commerce, culture, tourism, sports and exhibitions, has become an important force to stimulate the deep vitality of domestic demand," said Dong Yu, executive vice president of the China Institute for Development Planning at Tsinghua University.

In addition to the explosive growth in service consumption, goods consumption, especially large-ticket items, has also picked up steam, supported by favorable trade-in policies.

The National Development and Reform Commission and the Ministry of Finance in April allocated 62.5 billion yuan (about $9.1 billion) in new ultra-long special treasury bonds to local governments, the second batch of funds raised through such bonds for the programs this year, to support the steady implementation of consumer goods trade-in programs.

Meanwhile, many localities rolled out targeted policies to boost trade-ins during the May Day consumption window.

As of May 4, the 2026 consumer goods trade-in program had benefited 86.2 million people, driving total sales of 629.27 billion yuan, official data reveals.

Supply-demand innovations

This year's May Day consumption market has presented notable new trends, marking the transition of China's consumer market from quantitative recovery to qualitative upgrading, while there is still considerable room for domestic demand to be unleashed, said Hong Yong, associate researcher at the Chinese Academy of International Trade and Economic Cooperation.

Hong pointed out three major shifts – consumption motivation has changed from "destination-driven" to "interest-driven," consumption scenarios have expanded from "standardized scenic spots" to "personalized experience spaces," and policy effects have upgraded from "single subsidy" to "ecosystem coordination."

Young consumers are increasingly pursuing in-depth travel experiences. Meituan data reveals that the total order value of small group tours in Xinjiang Uygur Autonomous Region in northwest China rose 20% year on year during the May Day holiday, while average daily consumption of "exclusive family group tours" soared 555% year on year in this region.

On the goods consumption front, AI-enabled home appliances have become top sellers, with sales up 63% year on year between May 1 and 5, while passenger flow at core stores rose 50%, according to data provided by Suning, a leading Chinese home appliance retailer.

Holiday travel has notably boosted sales of trendy gadgets including high-end camera phones, AI glasses and action cameras.

Innovative ecosystem coordination practices have also emerged across the country to boost consumption. Xinxiang, a city in central China's Henan Province, has launched a "ticket stub economic alliance" covering 166 shops, where tourists can enjoy a discount of 5% at restaurants and 20% discount at chain hotels and homestays via any consumption receipt from alliance merchants, connecting the consumption closed loop of accommodation, catering and retail.

"One ticket stub connects hundreds of stores, which not only allows consumers to enjoy discounts, but also improves the mutual drainage efficiency of merchants, encouraging tourists to stay longer, have a meal and shop more," the People's Daily quoted an official with the Xinxiang Municipal Bureau of Commerce as saying.

Zhang Li, assistant minister of commerce, said China will continue to promote the pilot construction of new consumption formats, models and scenarios, accelerate the cultivation of carriers such as service consumption clusters, and build a number of new consumption scenarios integrating commerce, tourism, culture, sports and health, to further unleash consumption momentum.

Analysts noted that the strong performance of the May Day consumption market fully demonstrates the considerable resilience and upgrading potential of China's domestic demand, which will provide solid support for the steady growth of the Chinese economy throughout the year.