Saturday, May 25, 2024

China’s thrifty travelers show consumer confidence is weak

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Chinese tourists hit the road in greater numbers during the recent five-day Labor Day holiday but kept a tight grip on their wallets, reflecting still-weak sentiment in the world’s second-largest economy.

Travelers made 28.2% more trips but spending only rose 13.5% from the 2019 break, China’s Ministry of Culture and Tourism said in a statement Monday. This translates to a 11.5% drop in spending for each traveler over the holiday that ended on Sunday, according to banks including Societe Generale, Goldman Sachs and Citigroup.

“Spending per head softened and was again below the pre-pandemic level, owing partly to more tourist flows toward lower-tier cities, and suggesting continued consumption downgrading,” said Goldman economists including Lisheng Wang in a note late Monday, adding that more policy support is needed to sustain the recovery of the services sector. The 2019 holiday was one day shorter.

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