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China's 'Golden Week' consumer spending offers economy rare respite

Kitco News

BEIJING (Reuters) - Spending on retail goods and dining during China’s week long National Day holidays returned to growth this year, offering unexpected respite to an economy that has been expanding at its weakest pace in almost three decades.

The “Golden Week” break, which started with National Day on Oct. 1 and ended on Monday, provides an important snapshot of Chinese consumers and tourists and their changing tastes and habits.

Overall revenue from retail and dining during the period rose 8.5% from a year earlier to 1.52 trillion yuan ($212.6 billion), helped by higher sales of white goods and increased spending on tourism and entertainment, state media reported, citing data from the commerce ministry.

That compares with a drop of 6.7% during the National Day holiday last year, the only decline since at least 2009 when the data became publicly available.

However, this year’s gain is still modest compared with the double-digit percentage increases in previous years.

Monthly growth in China’s retail sales of consumer goods has slowed to single-digits since the start of 2018 from gains of more than 10% in previous years, weighed down by softer domestic demand.

The retail sales data is published by the National Bureau of Statistics, and does not include spending on consumer services. The bureau will release retail sales figures for September later this month.

China said in August it would roll out a plan to boost disposable income in 2019 and in 2020 to spur private consumption. No details were given. [nL4N25C28S]

It also said local governments that have restrictions on auto sales should explore gradually relaxing or removing those curbs, while they should also encourage the purchases of new energy vehicles.

To encourage consumption, some Chinese cities have extended retail hours to promote “the night economy”, loosely defined as the 6 p.m. to 6 a.m. period, with cinemas, museums, gyms, supermarkets and tourist sites open for longer.

The city of Beijing has also offered subsidies to households looking to buy electrical appliances like a television or a refrigerator.

In the run-up to the National Day holidays this year, many local governments across the country had ramped up tourism campaigns, enticing tourists with new destinations and promises of cheaper holidays.

Reporting by Ryan Woo; Additional reporting by Beijing Newsroom; Editing by Mark Potter

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