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Chinese New Year recovery shows resilience of economy, say analysts

Xinhua | Updated: 2023-01-30 12:46
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Tourists have fun in Qianyuan Town of Deqing County, Huzhou, East China's Zhejiang province, Jan 22, 2023. [Photo/Xinhua]

LONDON -- A rebound in travel and consumption during the Spring Festival holiday illustrates the resilience of the Chinese economy and supports forecasts of a further recovery, analysts have said.

"The global consumer goods industry has its eyes on the Chinese Spring Festival 2023 -- the acid test for the Chinese consumption engine," said consumer analyst Bobby Verghese at the data analytics and consulting company GlobalData in a written interview with Xinhua.

Verghese added that manufacturers, retailers, and hospitality operators are enthused by the positive consumer response to the holiday celebrations.

The analyst noted that both multinational and regional companies have rolled out customized offerings for the Year of the Rabbit, with marketing campaigns themed on the revival of family gatherings and traditional rituals.

"Luxury brands and service providers are at the forefront, tapping the resumption of travel and tourism, outdoor dining, and gifting activities," Verghese said, noting that many companies are using this occasion to showcase their latest offerings and deliver novel digital brand-engagement experiences to shoppers.

Official statistics showed about 308 million domestic trips were made in China during this year's Spring Festival holiday, up 23.1 percent year-on-year. The holiday box office sold a total of more than 187.6 million tickets as of 12 pm (1600 GMT) Friday, generating a whopping revenue of 6.76 billion yuan ($988 million).

In China, mobility started to recover quickly in early January. Intra-city traffic has nearly returned to pre-COVID-19 levels, noted an analysis published by multinational financial services company Societe Generale on Thursday.

A consumption recovery is also underway, with sales of food, beverages and clothing rising month-on-month in the first half of January at key retailers and the booking rate rebounding to over 80 percent in some hotels and bed-and-breakfasts in Shanghai and Yunnan, the analysis added.

"We now see an early and strong recovery starting in Q1, with three quarters of above-trend growth. Private consumption, particularly that of services, is set to lead the recovery, supported by pent-up demand, a recovering labour market and excess savings," it noted.

A report published by the investment banking company UBS on Thursday also mentioned that travel and box office data during the first four days of China's Lunar New Year showed signs of recovery.

"The latest data supports our view of a recovery in consumption and activity in the current quarter, with such momentum picking up pace from 2Q onwards," it added.

In recent decades, China has evolved into a global economic leader in consumption, trade and investment, another UBS report said on Wednesday.

"As a result, the country has played a meaningful role as a global growth engine -- not only benefiting Chinese companies and its people, but many other developing and developed markets," it added.

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