Since the start of the Lunar New Year holidays on January 21st, China has experienced a rapid resurgence in consumer spending within the service industry, bouncing back from a difficult period during an unprecedented pandemic wave in December and January.
Evidence of remarkable growth has been observed in various sectors, including dining, moviegoing, accommodation, and tourism.
Since late January, enthusiastic tourists have flocked to popular cities, causing hotels to be booked up and even pushing up local coffee prices.
Sources have reported that some popular restaurants have had waiting lists exceeding 4,000 tablets per day during the January holidays and 1,000 to 2,000 tablets on weekends in February.
Additionally, people are lining up at popular temples to pray for their fortunes in 2023, as January-February ticket orders for temple-related scenic spots increased by 310% from the previous year, according to data from Chinese travel agency Ctrip.
However, something has been lacking during this period of rapid spending growth.
While air tickets and hotel prices in popular cities have been rising, urban bus operations in Shangqiu, a city with close to 8 million residents in central China’s Henan province, were almost suspended in late February due to inadequate fiscal subsidies.
Furthermore, although the number of people, mostly tourists, applying for outbound travel permits in Shanghai hit an all-time high in January, the number of empty containers waiting for export goods at the ports of Shanghai and Shenzhen remained near-record high as of the end of February.
Fancy coffee shops in big cities have been packed with people enjoying sunny afternoons, but people with low expectations of future income and property prices have significantly reduced their spending, resulting in substantial excess savings.
According to the People’s Bank of China, the increase in China’s household deposits reached an all-time high of Yuan 17.9 trillion ($2.589 trillion) in 2022, much higher than the Yuan 9.9 trillion increase in 2021. In January, there was a record-high growth of Yuan 6.2 trillion from the previous year.
Respondents to PBC’s latest survey have indicated that more than 60% of urban savers prefer to save more, while only 16% prefer to invest more.