During the five-day May Day holiday, Chinese spending increased by 8% year-on-year, reaching 180.27 billion yuan (approximately $25 billion), indicating that consumer activity remains vibrant.<\/p>\n
An estimated 314 million domestic trips were made, marking a 6.4% increase compared to the previous year.<\/p>\n
The May Day holiday, one of the country’s longest breaks, is closely watched as a barometer of Chinese consumer confidence.<\/p>\n
China’s Ministry of Culture and Tourism recorded 314 million domestic trips during the holiday, a 6.5% increase, while the number of transactions using Weixin Pay, a popular payment app, rose by more than 10% year-on-year, with a notable surge in restaurant spending.<\/p>\n
According to Reuters’ calculations based on official data, total spending per person during the five-day May holiday period, typically a busy time for family travel, increased by 1.5% to 574.1 yuan.<\/p>\n
This figure remained below pre-pandemic levels, when spending per person was 603.4 yuan.<\/p>\n
Consumption in the world’s second-largest economy has been hurt by a post-pandemic slowdown and a prolonged property crisis, with the effects of the US-China trade war expected to deepen these challenges.<\/p>\n
Meanwhile, China’s services sector saw a slowdown in new order growth compared to March, according to a private sector survey released on Tuesday, due to uncertainty caused by US tariffs.<\/p>\n
Despite stronger-than-expected economic growth in the first quarter, supported by government stimulus, the Chinese economy continues to face persistent deflationary risks.<\/p>\n
The Caixin\/S&P Global services purchasing managers’ index (PMI) fell to 50.7 from 51.9 in March, marking its lowest reading since September.<\/p>\n
This aligns largely with the official survey, which showed services activity in China easing to 50.1 from 50.3 the previous month.<\/p>\n
The Caixin services survey indicated that new business growth slowed to its weakest level since December 2022, although export orders saw some increase, partly linked to the recovery in tourism.<\/p>\n
Zichun Huang, China economist at Capital Economics, said the drop in the Caixin PMI “provides further evidence that the trade war is weighing on economic activity in China, even beyond the manufacturing sector.”<\/p>\n
Huang added, “While some caution is clearly warranted, we suspect firms are overstating how much damage US tariffs will do.”<\/p>\n
Around 48% of China’s workforce was employed in the services sector in 2023, and the sector contributed 56.7% to total GDP last year. However, US President Donald Trump’s trade actions could hit the manufacturing sector and damage businesses’ hiring plans and consumer confidence.<\/p>\n
Business sentiment in the services sector grew at its slowest pace since February 2020, with companies citing US tariffs as a major concern.<\/p>\n
Service providers cut jobs for a second consecutive month to reduce costs, leading to an increase in backlogs of work and pushing the relevant indicator into expansionary territory for the first time this year.<\/p>\n
Firms also lowered prices to attract customers despite high input costs.<\/p>\n","protected":false},"excerpt":{"rendered":"
During the five-day May Day holiday, Chinese spending increased by 8% year-on-year, reaching 180.27 billion yuan (approximately $25 billion), indicating that consumer activity remains vibrant. An estimated 314 million domestic trips were made, marking a 6.4% increase compared to the previous year. The May Day holiday, one of the country’s longest breaks, is closely watched […]<\/p>\n","protected":false},"author":1,"featured_media":9347,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"ep_exclude_from_search":false,"footnotes":""},"categories":[4],"tags":[9692,3327,3291,9690,2052,9689,9693,2671,9691,1931,787,5851],"class_list":["post-9346","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-asia","tag-caixin-pmi","tag-china-economy","tag-consumer-spending","tag-domestic-travel","tag-economic-growth","tag-may-day-holiday","tag-purchasing-managers-index","tag-sp-global","tag-services-sector","tag-tourism","tag-trade-war","tag-us-tariffs"],"yoast_head":"\n