Chinese splurge during Golden Week

People turned up in force at a village square (top) to have lunch with family members and friends to celebrate the Spring Festival in Taizhou, Zhejiang province, last Thursday. Meanwhile, others queued to enter a shop (above) in Florentia Village in
People turned up in force at a village square (above) to have lunch with family members and friends to celebrate the Spring Festival in Taizhou, Zhejiang province, last Thursday. PHOTO: REUTERS
Meanwhile, others queued to enter a shop (above) in Florentia Village in Wuqing district, Tianjin, on the same day. The shopping village, which resembles a 16th century Italian town, features nearly 200 brand-name stores.
Meanwhile, others queued to enter a shop (above) in Florentia Village in Wuqing district, Tianjin, on the same day. The shopping village, which resembles a 16th century Italian town, features nearly 200 brand-name stores.PHOTO: XINHUA

Retail and restaurant sales up 11.2% from last year, even as economy slows down

For a week every year during Ms Yuan Lixin's trip back to the south-western city of Chengdu from Beijing to celebrate Chinese New Year with her family, the usually thrifty accountant turns into a big spender.

"You're with your family for such a short time, so of course you want everyone to have a good time, especially when the mood is so festive," she told The Straits Times. "A substantial part of the money I save is usually spent during this period."

This year, she spent about 6,000 yuan (S$1,300) buying gifts for her parents, siblings as well as her two nephews who received board games costing a total of 800 yuan.

  • FESTIVAL FIGURES

  • 754 billion yuan (S$160.7 billion): Retail sales and restaurant receipts, an 11.2 per cent increase from last year

    660 million yuan: Record box office takings on the first day of Chinese New Year

    365 billion yuan: Total tourism revenue, up 16.3 per cent from last year

    13.8 billion yuan: Income from domestic tourism, a 14.2 per cent gain from the previous year

    6 million: The estimated number of Chinese who travelled overseas

    312 billion yuan: The amount of UnionPay card transactions, up 30 per cent from last year, with spending on dining, shopping and entertainment accounting for the largest part

Defying the country's downbeat economic outlook, Chinese consumers like Ms Yuan splurged during the week-long Spring Festival holiday, with higher spending recorded in a wide range of areas from tourism to cinema takings.

Retail sales and restaurant receipts in the world's No. 2 economy totalled some 754 billion yuan in the Golden Week holiday starting from Feb 7 - the eve of the new Year of the Monkey - to Feb 13, according to data by the Commerce Ministry.

This is 11.2 per cent more than last year - an encouraging sign as Beijing engineers a shift towards growth powered by services and consumption, and away from manufacturing and investment, even as China grapples with its slowest growth in a quarter of a century.

Items such as clothes, liquor and tobacco; gold and jewellery - especially monkey-themed accessories; and digital products enjoyed robust sales, with the catering sector also "thriving", said the ministry in an online statement.

In comparison, retail sales grew at a slightly slower 11 per cent last year as sales of traditional festival-related goods saw rapid growth but purchases of high-end gifts such as tobacco and liquor cooled as the government's austerity campaign that first began in 2013 continued to dampen sales.

Box office takings also smashed records this year with 660 million yuan collected in receipts on the first day of the Chinese New Year, rising to 1.7 billion yuan by the third - not far off the total for the whole holiday week last year, the ministry said.

The Internet also gave festive sales a boost with online vendors launching promotional events and innovative new tie-ups.

In the eastern cities of Hangzhou and Nanchang, for instance, families were able to use smartphone apps to hire cooks to prepare reunion dinners traditionally held on the eve of the new year, allowing them to feast in the comfort of their homes.

Data from e-commerce giant Alibaba also showed that around 14 per cent of purchases during its holiday promotion were delivered to addresses different from that of the customers', suggesting that about 280 million orders were gifts.

But the celebrations were not just restricted to hometowns. Domestic tourism also set the tills ringing, with income during the period surging 14.2 per cent to 13.8 billion yuan, the China National Tourism Administration said.

An estimated six million mainlanders also travelled abroad. According to bookings made on popular travel website Ctrip, eight of the top 10 Chinese New Year holiday destinations were in Asia. They included Thailand, Japan, South Korea and Singapore.

Experts said that while the recent data bodes well for a more consumption-led growth model, the weak external environment is still likely to take a toll on the Chinese economy.

Yesterday, trade data showed exports falling 11.2 per cent year on year last month, compared with a 1.4 per cent dip in December. Imports also extended a stretch of declines to 15 months, tumbling 18.8 per cent.

Mr Matthew Crabbe, research director at market research firm Mintel, noted that as the wider economy shifts towards a greater dependence on domestic consumption, the Internet will be a key plank in raising its significance.

"Online retail is creating a new means to sell more expensive, better quality goods and services to consumers who are seeing their average incomes increase strongly, including in the rural areas that have until now been hard to reach," he told The Straits Times.

A version of this article appeared in the print edition of The Straits Times on February 16, 2016, with the headline 'Chinese splurge during Golden Week'. Print Edition | Subscribe