Visitors near the Yuyuan Bazaar in Shanghai, China, on Sunday, February 11, 2024.
Raul Ariano | Bloomberg | Getty Images
China's travel activity and spending rose above pre-pandemic levels during the Lunar New Year holiday, a sign that consumption is improving in the world's second-largest economy.
Some 474 million domestic trips were made during the eight-day festival, a 34.3% increase from last year, according to data released by the country's Ministry of Culture and Tourism on Sunday.
Tourists spent nearly 632.7 billion yuan ($87.95 billion) on domestic leisure travel, up 47.3% from a year earlier, data showed.
State broadcaster China Central Television, citing the ministry, said domestic travel represented a 19% increase compared to the same period in 2019, while spending rose 7.7%.
The strong data comes as policymakers in China are scrambling to boost domestic consumption as the country faces deflationary pressures.
According to the ministry, there were 3.6 million tourist departures and 3.23 million tourist arrivals in mainland China during the holiday, as visa-free travel with certain countries accelerated the recovery in both outbound and inbound travel during the holiday.
Lunar New Year is China's most important holiday and is often seen as a key indicator of consumer sentiment in the country.
However, the sustainability of the increase in travel remains uncertain as tourism revenue per trip was still below pre-pandemic levels.
“While we see some strength in the data, we urge market participants to exercise caution,” Nomura analysts wrote in a note to clients, emphasizing that the numbers reflected pent-up demand from consumers as this is the first-ever Lunar New Year holiday has no longer been affected by the pandemic-related factors since 2019.
“In interpreting the remarkably high year-on-year growth rates, we must take into account the very low base from last year during the peak of the Covid ‘exit wave,’” Nomura said.
China's stocks rose on Monday, led by the tourism sector, as trading resumed after a week-long shutdown.
Market participants have also been waiting for additional stimulus measures from Chinese policymakers that would support the economy and potentially boost spending this year.
The People's Bank of China kept its key interest rate stable as expected on Sunday, as investors reassessed when the U.S. Federal Reserve might begin easing monetary policy this year.
A delay in rate cuts could potentially limit Beijing's room to maneuver in setting its own policies, as monetary easing in the US bodes well for the yuan.
People's Bank of China deputy governor Zhang Qingsong said earlier this month that the country has also encouraged banks and local businesses to accept foreign bank cards and is considering further steps to make mobile payments even easier for international visitors make.
— CNBC's Evelyn Cheng and Clement Tan contributed to this report