China holiday spending sends a strong signal on consumer stimulus plans

BEIJING — China’s consumer market is recovering — simply sufficient that policymakers seemingly will not have to roll out the large-scale stimulus that buyers have lengthy hoped for.

The nine-day Lunar New 12 months, which ended Monday, noticed a regular rise in spending throughout the nation, from lodge bookings to duty-free buying. Rail journey hit a file of over 18.7 million passengers in a single day.

The higher-than-expected information recommend that Beijing’s latest assist measures are efficient, whereas underscoring a broader consumer pattern: spending on experiences akin to journey and leisure remains to be choosing up quicker than conventional items, CCB Worldwide Securities mentioned in a report Tuesday.

China’s retail gross sales have remained sluggish because the pandemic. Not like the U.S., which handed out money to shoppers, Beijing has as an alternative provided trade-in packages and vouchers. Chinese language authorities have more and more emphasised the necessity to enhance shoppers’ incomes, however have but to launch particulars.

That is not prone to change quickly.

“Policymakers are prone to construct on the optimistic [holiday] momentum and introduce focused, incremental easing across the March Two Classes to stabilize expectations and maintain the restoration,” the CCB analysts mentioned, referring to the annual parliamentary conferences that kicks off subsequent week.

Chinese language Premier Li Qiang is about to announce the 12 months’s financial targets and coverage priorities on March 5.

Regardless of the journey rebound, shoppers remained worth delicate. Nationwide, tourism journeys per day grew by 5.7% on common from a 12 months in the past, according to 2025, based on official holiday figures launched late Tuesday. Regardless that spending climbed by 5.5%, it slowed from 7% in 2025.

“Such tendencies replicate higher sentiment from a longer holiday, however shoppers remained finances cautious generally,” Morgan Stanley Fairness Analyst Lillian Lou mentioned in a report Wednesday.

In a signal of persistent deflationary stress, the holiday recorded a 0.2% drop in common spend per vacationer journey in contrast with a 12 months in the past, based on CNBC’s evaluation of official information.

To spice up consumer spending, China prolonged the official holiday interval by in the future in contrast with final 12 months. Many individuals additionally took private depart across the holiday, suggesting the official figures could not seize the complete spending image.

“The prolonged holiday inspired households to journey collectively,” Jihong He, chief technique officer at H World Group, one in every of China’s largest lodge operators, mentioned in a assertion.

“That shift is driving demand for bigger rooms and family-friendly configurations designed for shared experiences,” He mentioned.

H World operates greater than 12,000 lodges throughout over 30 manufacturers in mainland China. For the Lunar New 12 months, the corporate mentioned the highest 10 locations, with lodge occupancy charges of 90% or larger, had been all positioned in southern or coastal cities, together with Sanya within the tropical island province of Hainan.

China in December expanded a zero-tariff coverage for the island to encourage duty-free luxurious items purchases inside the mainland. Official figures confirmed Hainan’s holiday-period duty-free gross sales rose 30.8% from a 12 months in the past to 2.72 billion yuan ($400 million).

Alibaba-owned journey reserving platform Fliggy mentioned bookings for lodge and theme park packages in the course of the holiday season greater than doubled from final 12 months. Extra distant, scenic locations akin to Altay in Xinjiang and Pu’er in Yunnan additionally noticed bookings greater than double, the corporate mentioned.

China has sought to advertise its rising providers sector. This month, the Nationwide Bureau of Statistics disclosed that it was giving extra weight to providers in its consumer worth index than within the earlier base interval in 2020.

Even consumer items in China are more and more oriented in the direction of eating and social actions, Bruce Pang, adjunct affiliate professor at CUHK Enterprise Faculty, mentioned in Chinese language remarks translated by CNBC.

The important thing to consumption restoration is confidence in earnings and employment prospects, he mentioned, somewhat than buying promotions. Policymakers ought to place better emphasis on these long-term points, Pang added.

Within the fall, China’s prime leaders pledged to spice up consumption over the following 5 years, and have subsequently mentioned the nation will prioritize home demand.

Native governments in China issued greater than 2.05 billion yuan in consumption vouchers and subsidies forward of the holiday, CCB analysts mentioned, “successfully placing a ground underneath demand.”

Nevertheless, prioritizing consumption doesn’t essentially signal sweeping stimulus, mentioned Liqian Ren, director of Trendy Alpha at U.S.-based fund supervisor WisdomTree.

As an alternative, Beijing seems centered on stopping consumption progress from slipping beneath a sure degree, Ren famous, indicating sector progress of roughly 2% to three%.