Last year, China’s economy saw a growth of 5.2 percent, meeting the official target of approximately 5 percent. However, the recovery process has been uneven, requiring the Beijing government to introduce economic stimulus. Since the end of the Corona containment measures in 2022, the People’s Republic has been struggling to return to its pre-pandemic high-growth phase.
On top of the ongoing real estate crisis due to the billion-euro bankruptcy of Evergrande, the crucial export sector is also facing challenges. Recent severe sell-offs on the stock exchanges led to intervention by the Beijing leadership. State-backed investors increased their share purchases while the authorities curbed net sales and short sales, particularly by funds.
Uncertainty and skepticism about economic performance, coupled with rising unemployment, are reducing consumer spending. The sharp fall in prices at the start of the year, the biggest in over 14 years, is stoking fears of a deflationary spiral that could harm the economy. The inflation rate remained low at just 0.2 percent, the same as the previous year. Expecting further price drops, the Chinese are cutting back on their spending.
During the holiday week, many factories are not operating, some even longer. “Frequently, no one answers the phone,” says Rößler. This standstill is impacting exports and, to some extent, global supply chains.
Nine billion trips
Instead of working, the Chinese are now traveling. Whether it’s family visits, sightseeing, or long-awaited vacations, the travel wave is surging like never before, following the Corona-related restrictions of the past few years. The masses are taking advantage of the newfound freedom to travel. The peak travel season, known as “Chunyun”, began on January 26 and continues until March 5th. The Chinese Ministry of Transport predicts approximately nine billion (!) individual trips during this period.
This figure is due to many travelers requiring several journey segments to reach their destination or embarking on multiple trips consecutively. The Chinese media are referring to this as the “largest migration of people in human history”.
The travel platform Ctrip reveals that there are over three times as many travel bookings around New Year 2024 compared to the previous year, and five times as many hotel reservations. Air China has increased domestic flights by 30 percent.
The surge in travel is primarily within China. One of the top destinations is Harbin, where the Ice and Snow Festival draws in millions of visitors. To ski, the Chinese travel to Japan or South Korea. However, skiing remains a niche sport, according to Rößler.
“Those who can afford it, prefer to visit Japan as the snow conditions are similar to those in China.” Thailand is also a popular choice, having waived visa requirements. The economic expert suggests that group trips to Europe, and therefore Austria, will restart soon. The flights are costly and require some planning ahead. Air China will soon increase flights from Vienna to Beijing.