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  • Hamsini Hariharan

Travelling for leisure: The unthinkable is reality in China

This article first appeared in CNBC TV-18 on August 24, 2020 and can be accessed here.

While taking a holiday might be unthinkable for most people worldwide, the last two weeks witnessed a massive travel spike in China. The occasion is Golden Week, the weeklong national holiday between October 01 and 07 – one of three long holiday weeks every year. The Lunar Holidays in January coincided with the outbreak of the COVID-19 and were extended by the government. But they were not relaxing by any means.

Over the last year, the Chinese government has worked hard to limit coronavirus effects, even using dramatic efforts. By July, The Chinese Ministry of Culture and Tourism allowed tourism across provincial borders. Since August 15, China has not reported any new cases, even leading to Beijing city to abolish the requirement of face masks. In Hangzhou, the city government didn’t even require people to show their Health Codes to enter and exit places.

By October, the excitement for Golden Week was palpable. The Chinese government announced a 75% cap on cinemas and tourist places, but the number of people travelling within the country still exploded. Usually, the elite would leave China, but travel has been restricted across the board to within the country because of tight border regulations.  While the number of tourists touched 800 million last year, 637 million tourists generated 467 billion yuan ($70 billion) in revenue in the first seven days of the Golden Week holiday in 2020.

The Chinese box-office also saw huge numbers as movies scheduled to release in January finally saw the light of the day over the last two weeks. Because of films like Leap, The Eight Hundred, My People, My Homeland, and Jiang Ziya, the total box office receipts on the mainland from October 1 to 4 reached 2.5 billion yuan (US$368 million).

Tourism across Asia has taken a hit since the beginning of the pandemic. The week-long Labour Day holiday in May saw a near 60% decline in domestic tourism revenue as compared to last year. Chinese airlines, running in the losses in the first two quarters, began a cutthroat price war to boost air travel. The Chinese economy highly depends on domestic consumption, as it accounts for about 55% of China’s GDP, with private consumption accounting for 40% and government expenditures making up the balance. Earlier in the year, various provincial governments began to hand out vouchers and coupons to encourage citizens to spend. The hope was the revenge spending (复性消费), or the phenomenon where the citizens would buy even more than at normal levels would drive up consumer demand.

The state-owned Chinese media quickly pointed out that Golden Week provided a much-needed impetus to the Chinese economy by boosting domestic consumption. But critics argue that a closer look at the numbers shows that the picture is not as rosy. Zhou Xin in the South China Morning Post points out, “The images showing parts of China being particularly crowded, and some restaurants being very popular, do indicate some resurgence in consumer behaviour, but they also reflect a trend that consumers are increasingly concentrating their spending, partly thanks to the popularity of online recommendations.” While Golden Week might have picked up the strands of normalcy in China, the country still has a long way to recover its economy.

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