The sharp increase in tourism revenue during the Chinese New Year holiday has not only surpassed pre-pandemic levels, but also provided some relief to Chinese policymakers, who have been worried about deflationary pressures.
According to data released by China's Ministry of Culture and Tourism on Sunday, domestic tourism spending has surged by 47 percent this year compared to the same period in 20223%, reaching a staggering 632.7 billion yuan (about 879.7 billion$600 million). Much of this growth was driven by the extension of holiday time – from the usual seven to eight days, which drove overall consumption. At the same time, the boom in domestic and international tourism has also contributed to this growth.
Compared with the Spring Festival holiday in 2019, domestic tourism spending increased by 7 this year7%, while domestic tourist arrivals also increased by 19%. In addition, according to the National Immigration Administration, the total number of arrivals and exits during the Spring Festival has recovered to 90% of 2019 levels.
During this year's Spring Festival, the number of domestic tourists increased by 34% year-on-year3%, up to 47.4 billion passengers. In terms of international travel, the number of people entering and leaving China during the Spring Festival was about 13.52 million, a significant increase of 28 times. This growth reflects the gradual recovery of China's important position in the global tourism market.
As one of the most important festivals in China, the Lunar New Year has always been a time for hundreds of millions of Chinese to return home to their families. However, since the outbreak of the pandemic, this large-scale population movement has been severely affected. Although the domestic tourism industry has recovered with the easing of the epidemic and the opening up of the economy, it will still be repeatedly impacted by the epidemic in 2022.
This year's tourism boom has undoubtedly brought some comfort to Chinese policymakers, but there is uncertainty about the sustainability of this boom. Currently, China, the world's second-largest economy, still faces deflationary risks, weak consumer demand, and high youth unemployment. At the same time, the downturn in the real estate sector, one of the important pillars of the job market, has further weighed on consumer demand.
Against this backdrop, China's central bank on Sunday decided to keep the one-year medium-term lending facility (MLF) rate unchanged. This decision reflects the PBOC's cautious approach to monetary policy adjustments, as any radical adjustment could re-increase the pressure on the renminbi to depreciate and the risk of capital outflows. Still, China** is grappling with balancing the delicate relationship between economic growth and financial stability.