Opinion: New Year's shopping spree signals a promising economy
John Gong

Editor's note: Dr. John Gong is a research fellow at the Charhar Institute and a professor at the University of International Business and Economics. The article reflects the author's opinion, and not necessarily the views of CGTN.

The Lunar New Year is traditionally the time when people go on a shopping spree, and this year is no exception. Official statistics from the Ministry of Commerce show the total retail expenditure from February 4 to 11, including spendings on dining out, exceeded one trillion yuan for the first time, an 8.5 percent increase year-on-year. That is about 750 yuan per capita for that joyful week or about 100 yuan spent by one person per day. 

Well, I definitely spent more than that, many times more in fact. Travel is a big expense. Dining out with extended family members costs several times more than a few grand. Entertainment has increasingly become an important part of the expenditure during the holiday season. All told, I probably shelled out half of my monthly income in that week. And I am sure most of my friends in the city belong to the same league.

Jack Ma of Alibaba now has a famous saying: "Spending money is much more difficult than making money." OK, I have not reached his level yet. For me, it is still a lot easier. And I am proud that I have made my fair share of contribution to the economy.

An 8.5 percent increase in consumption exceeds last year's GDP growth by a huge margin, which was 6.6 percent. And this is a good sign amid a sea of gloomy readings about the economy in recent weeks.

People shop in a supermarket in Yichang, central China's Hubei Province, February 7, 2019. /VCG Photo

People shop in a supermarket in Yichang, central China's Hubei Province, February 7, 2019. /VCG Photo

Yes, there are signs that things are slowing down. There are signs that companies are laying off people. There are signs that investment plans are being shelved. The country does need some good news to prop up business expectations. At least, this year's holiday consumption statistics deliver a sign of relief. Domestic consumption is indeed the last savior to pull us out of a looming recession, and at least in the last week, people in China have not failed us with their wallets. Hopefully, the momentum will continue into the rest of the year to prop up the GDP growth over the targeted six percent.

There are several new trends that are worth mentioning here. First, the expenditure on cultural goods and tourism have seen robust growth. A new phenomenon is that many families are flying abroad during the Spring Festival week. I myself have talked about this idea with my parents, and we will see how it goes next year.

Box-office sales statistics haven't come out yet. Watching a movie together has become a typical way for families to celebrate the Chinese Lunar New Year. Last year it was 5.72 billion yuan. Operation Red Sea became a blockbuster, earning 3.65 billion yuan. This year The Wandering Earth is doing exceptionally well. 

People queued up at a theater in Taiyuan, north China's Shanxi Province, February 5, 2019. /VCG Photo

People queued up at a theater in Taiyuan, north China's Shanxi Province, February 5, 2019. /VCG Photo

Increasing expenditure on things other than food is not surprising after all, as the consumption pattern in China is steadfastly following the Engle's law, which states that as income rises, the proportion of income spent on food falls, even if absolute expenditure on food rises.

We Chinese love trying different cuisines. It is just we are dining out more and more these days. I don't have the statistics for the overall country's GDP contribution from the restaurant industry, but I do have the statistics for the Canton (Guangdong) Province, which is about 10 percent of the local GDP. The comparable statistics in the U.S. is about four percent. I guess this Chinese Lunar New year week is more than 10 percent. Certainly, in our family, it is way more than 10 percent.

Eat, drink and play! That's the best time of the year in Chinese tradition. The latest statistics show that this year people are still on a shopping spree during the holiday season. Thankfully, they still eat, drink and play – hopefully into the rest of the year too.

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