The eight-day National Day holiday, overlapping the Mid-Autumn Festival, is set to provide a spending boom, boding well for China”s economic recovery.
The tourism sector, reeling from the COVID-19 epidemic, is eyeing a stepped-up rebound. Data from Trip.com Group said the number of domestic trips during the holiday is likely to top 600 million, 70 to 80 percent of last year’s number.
Entertainment is also expected to embrace a lucrative period, as the box office could bring in as much as 4.6 billion yuan ($675 million), or 110 percent of the seven-day National Day holiday in 2019, said Zhang Xueqing, an analyst with China International Capital Corporation Limited.
The catering industry is seeing robust restorative growth. In the two weeks before the holiday, dinein orders nationwide saw an increase of over 40 percent year-on-year, and online bookings for the holiday surged by 37 percent, according to data from Meituan, an e-commerce platform for services.
The upbeat signs in these areas mirror the revival of consumption, the main engine of China’s economic growth.
Official data showed that retail sales of consumer goods rose by 0.5 percent year-on-year in August, returning to growth for the first time this year.
In an executive meeting on Sept 10, the State Council, China’s Cabinet, stressed the importance of boosting consumption, urging efforts to remove consumption-related bottlenecks and encourage market players to embrace innovation to further unleash the potential of domestic demand and inject impetus into economic recovery.
The longest holiday since the outbreak brings opportunities for virus-dampened sectors－which are already on the mend－to turn the corner, said Ying Xiwen, a senior researcher with China Minsheng Bank.
Improved consumption will provide momentum for the economy to perk up for the rest of the year, he said.
The country’s economic growth is likely to post evidence of acceleration in the third quarter if recovery sustains its momentum in September, said Fu Linghui, spokesperson of the National Bureau of Statistics.
Gross domestic product expanded by 3.2 percent year-on-year in the second quarter, reversing a contraction of 6.8 percent in Q1, according to the NBS.
Following a better-than-expected Q2 rebound in GDP, the World Bank has raised its growth forecast for the Chinese economy this year to 2 percent, up from the 1 percent growth projection released earlier.
Prospects for China are brighter in 2021, with its economic growth expected to reach 7.9 percent, if business activities continue to normalize, said the World Bank.
China’s huge domestic consumption potential has become its new comparative advantage, and that’s why the country seeks the new development pattern to benefit itself and the rest of the world, said Yao Jingyuan, a research fellow at the Counsellors’ Office of the State Council.