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China is hoping for Lunar New Year spending to boost the economy

China is hoping for Lunar New Year spending to boost the economy during the ongoing holiday.

China's Lunar New Year, also known as the Spring Festival, is seen as an indicator of the health of the Chinese economy as increased spending can provide insight into consumer confidence. China's economy continues to struggle with weak domestic demand as the expected recovery from the COVID-19 pandemic remains to be seen.

Chinese authorities have estimated that tourists will make 9 billion trips during a 40-day leisure travel period starting Jan. 26, authorities said last month.

The official holiday period will last between February 10th and 17th. However, from late January to March, many Chinese travel or meet their families – leading to a period of increased consumer spending. The travel surge in China is locally referred to as “Chunyun.”

So far, China vacationers have made 195.24 million passenger trips using various modes of transportation as of Friday, Lunar New Year's Eve, state news agency Xinhua reported, citing official statistics. According to Xinhua, this was a 26.7 percent increase in total passengers compared to the same period last year.

According to Xinhua, road traffic rose to 184.62 million passenger trips, up 24.2 percent year-on-year.

During the 2023 Lunar New Year, over 1.5 billion passenger trips were made in China during the 40-day Spring Festival, Xinhua reported at the time.

Chinese nationals made 8.257 million trips by train, an increase of 98.8 percent, while they made 1.797 million trips by air, an increase of 137.7 percent, Xinhua reported.

Despite signs of a relatively better recovery in domestic travel, Chinese tourists have not taken trips to distant international destinations on vacation, which was the norm before the COVID-19 pandemic.

Chinese tourists are looking to Southeast Asia, including Singapore, Thailand and Malaysia, rather than places in Europe or North America, Reuters reported.

Singapore, Thailand and Malaysia have recently changed their visa requirements to attract Chinese tourists during the holiday season and beyond

“There is a sense that the economic hardship and lack of disposable income is hitting much harder than in other parts of the world and that all travel is therefore in China, where costs are lower,” said John Grant, principal analyst at travel data firm OAG, said Reuters.

China hopes the holidays will boost domestic travel and boost spending for the rest of 2024

“Chinese tourists are expected to make more than 6 billion domestic trips in 2024, and the total number of inbound and outbound tourists traveling abroad is expected to exceed 260 million, according to a recent report from the China Tourism Academy,” Xinhua reported on Monday.

A Spring Festival flower market in China's southern Guangdong province, Jan. 20, 2023. China is hoping for Lunar New Year spending to boost the economy.

STR/AFP via Getty

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Newsweek strives to challenge conventional wisdom and find connections in the search for common ground.

Newsweek strives to challenge conventional wisdom and find connections in the search for common ground.

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