China National Day – China’s Golden Week Truly Golden
Investors may think China has gone quiet this week but rest assured it hasn’t. The country’s eight-day National Day holiday started last Thursday, closing stock markets and many other institutions through Friday of this week. But that doesn’t mean China’s economy has gone dormant – far from it.
The cash registers are ringing as an estimated 200 million Chinese hit the road for vacations and traditional family gatherings. More Chinese than usual have chosen to travel this year to celebrate the Mid-Autumn Festival, a traditional event marking family reunions, on Saturday, which fell within the “golden week” holiday.
Put all of the holidays together and China rings up a spending spree.
China’s retail sales leapt to $2 billion during the first three days of the National Day Holiday. That’s up a very impressive 15 percent from the same period last year. (Compare that kind of growth to U.S. retail figures if you’re hard to impress.)
No question about it, China’s consumers are upbeat about their economic prospects. From October 1st through October. 3rd, China’s 1,000 key retailers reported a total of 14 billion yuan in sales revenues, with household electrical appliances, jewelry, clothing, and cars leading the surge.
The shopping spree was even hotter in China’s financial hub, Shanghai. Sales at department stores and shopping centers in Shanghai soared as consumers took advantage of holiday discounts and marketing promotions. The city’s major shopping centers saw sales increase of 61 percent from a year ago!
Catching a snapshot of this booming city, Shanghai’s retail sales totaled more than $176 million during the first three days of the National Day holiday thanks in part to a wedding boom. A survey by the Shanghai Commerce Information Center found that 800 large and medium-sized retailers turned over a combined 1.25 billion yuan ($183 million) from October 1 to 3, up 23.6 percent from a year earlier, easily beating the national average.
Outside of Shanghai there are more signs of soaring prosperity – booming tourism. The 119 tourist attractions monitored by Beijing have reported about 3.47 million tourist arrivals, up 17.76 percent compared with the previous average, according to the National Tourism Administration.
As we have often said, growth in China’s internal economy is essential to the nation’s economic vitality as long as European and American export markets remain depressed.
It’s up to the Chinese to make their own prosperity by spending, not saving as much as they have in the past. There’s no doubt that some of this spending surge is fuelled by Beijing’s stimulus efforts. But, beyond government stimulus, it’s also encouraging to see this enormous surge in National Holiday spending.
The evidence from the retail arena is in. The Chinese are feeling rich and building their own prosperity in the process.
