China’s consumers will power its coronavirus recovery, as their blockbuster May Day spending shows

During China’s most recent long holiday, tourism, box office revenue and consumer good sales surged, returning to pre-pandemic levels. This augurs the sustainability of China’s economic recovery through the rest of the year

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People walk through an alley near Houhai lake in Beijing on May during the Labour Day holidays. Photo: AFP

Chaoping Zhu is a Shanghai-based global market strategist at JP Morgan Asset Management.

Published: 10:00pm, 14 May 2021Updated: 2:30am, 15 May 2021

The May Day holiday marked the first long national holiday since China almost fully relaxed its Covid-19 lockdown measures. The consumption data for those five days paints a telling picture of the recovery of domestic demand.

In order to stimulate consumption, the authorities extended the holiday to five days, making long-distance trips easier for consumers. This, coupled with pent-up demand left over from the pandemic, drove a strong consumption rebound in various sectors, as reflected by multiple data sources, media reports, as well as my own personal experience.

First of all, a strong wave of “revenge travel” was seen in the tourism market, as expected. After staying put during the last long holiday, Lunar New Year, due to tightened restrictions to contain mini-outbreaks in certain parts of the country, consumers took full advantage of May Day to travel and make up for lost time – 16 months of it.