The Golden Week holiday in China from Oct. 1-8 saw an increase in local spending and online foreign sales as the COVID-19 pandemic prevented millions from traveling overseas, CNBC reported Monday (Oct. 12).
The data is an indication that consumers in China still have money to spend, even if the country’s economy is still recovering from the pandemic. The province of Hainan, for example, has shown a 150 percent increase in sales —1.04 billion yuan ($155 million) over the same period in 2019.
The average daily sales for retail, food and beverages was 4.9 percent higher than last year's Golden Week holidays, China's Ministry of Commerce said.
This year’s celebration — the last vacation time of the year for Chinese residents — also included the Mid-Autumn Festival and the commemoration of the founding of the People's Republic of China in 1949.
The increased spending is largely from China's middle class, who were not financially affected by the pandemic as much as low-income groups, said Jianguang Shen, chief economist at JD Digits.
The growth in domestic demand is contributing to rising prices for many products, such as hotel stays, kitchen appliances, musical instruments and car accessories, he said. "The price increase is very obvious," Shen said in Mandarin, according to a CNBC translation.
An uptick in local travel across the country has China watching to see if there will be a resurgence of COVID-19 cases, said Wu Zunyou, chief epidemiologist at the Chinese Center for Disease Control and Prevention, the South China Morning Post reported.
Boston Consulting Group in September has estimated that the demand for luxury goods could underpin a spending boost on the order of 30 percent as the Chinese economy rebounds. It had been anticipated, however, that spending across the luxury industry could shrink by as much as 45 percent overall through 2020, due to the economic impacts of the lingering coronavirus.
The Chinese National Bureau of Statistics said August retail sales rose for the first time in 2020 by 0.5 percent from 2019.