China’s economy received a welcome shot in the arm during the Lunar New Year holiday, with travel and spending hitting record highs, CNN reports.
The surge in consumption is an encouraging sign for the government as it strives to revitalize the country’s struggling economy, facing challenges from property sector downturns to global trade tensions.
According to the Ministry of Culture and Tourism, a staggering 501 million trips were made within China during the eight-day holiday, which began on January 28. This represents a 5.9% increase compared to the same period last year. Tourism spending also saw a significant jump, reaching 677 billion yuan ($93 billion), a 7% rise year-on-year.
While average daily spending per trip saw a slight increase to 168.9 yuan ($23.2), it remained approximately 5% below pre-pandemic levels seen in 2019.
Cross-border travel also showed signs of recovery, with an average of 1.795 million daily trips into and out of China, slightly exceeding the pre-pandemic average of 1.79 million in 2019. A notable driver of this increase was the surge in foreign visitors, with numbers up by 22.9% compared to 2024. China’s recent efforts to roll out visa-free access to dozens of countries appear to be paying off, boosting tourism and stimulating consumption. One official cited third-party data indicating a 150% increase in foreign tourist arrivals during the holiday compared to last year.
Beyond travel, Chinese holidaymakers flocked to movie theaters, contributing to a record-breaking box office. A total of 187 million people visited cinemas, lifting the box office to a record high of 9.5 billion yuan ($1.32 billion), according to the China Film Administration. The animated film “Nezha 2,” became the top-grossing film in China of all time.
The robust holiday spending provides some relief for Chinese leaders, who have made “actively expanding domestic consumption” a top priority amidst subdued consumer and business sentiment.
The government has been actively implementing policies to stimulate spending. In December, the China Film Administration launched a public subsidy campaign, while local governments distributed cinema vouchers ahead of the holiday. The Finance Ministry also allocated 81 billion yuan ($11.1 billion) for trade-in programs for cars and household appliances.
However, it remains to be seen whether this positive momentum can be sustained in the long term. China’s economy continues to grapple with challenges such as youth unemployment and the struggling property sector.
Furthermore, China faces growing external pressures. The Trump administration recently imposed a 10% tariff on all imports from China into the US, prompting Beijing to respond with retaliatory economic measures targeting the US, including tariffs on coal, liquefied natural gas, crude oil, agricultural machinery, and certain vehicles.
In a State Council meeting, Chinese Premier Li Qiang emphasized the need to maintain confidence and coordinate efforts to address domestic economic issues while navigating external challenges. The Lunar New Year spending surge provides a glimmer of hope, but China’s path to economic recovery remains complex and uncertain.
