In China, the eight-day holiday is usually the peak season for home sales and tourism. But this year's Golden Week is not very prosperous.
Data showed that Chinese consumer spending and domestic travel fell short of government expectations during the long holiday that ended on Friday, while housing sales in major cities were weaker than last year.
China's economy has struggled with a prolonged slump in the property sector and weak exports and consumer demand. While there have been some recent signs of improvement, economists say the government still needs to do more to spur spending and ease pressure on the property sector to foster a more durable recovery, especially as high interest rates in the United States and around the world are expected to curb demand for Chinese exports in overseas markets.
Data from China's Ministry of Culture and Tourism showed that 826 million domestic trips were made during the eight-day Mid-Autumn Festival and National Day holidays, up 71.3 per cent year-on-year and 4.1 per cent higher than in 2019 before the outbreak.
According to the above data, domestic tourism revenue reached 753.4 billion yuan (nearly $105 billion), more than double that of the Golden Week holiday in 2022 and up 1.5% from 2019.
However, travel numbers and tourism revenue were lower than expected. The Ministry of Culture and Tourism said earlier that it expects 896 million domestic trips to be made during this year's double festival, generating 782.5 billion yuan in domestic tourism revenue.
Golden Week is usually the peak season for China's property market, but the average daily transaction area of new residential buildings in 35 representative cities during this year's National Day fell 20 per cent from the same period in 2022 and lower than the same period in 2019, according to the state-run Securities Times.
The holiday figures are a further sign that, despite some signs of improvement, China's economy is still far from fully healed.
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Business surveys last month showed China's manufacturing activity expanded in September for the first time in five months, but the woes of the property sector came back into focus with news of troubled developer China Evergrande Group (3333.HK). Xu Jiayin, the chairman of China Evergrande, is under investigation by authorities for alleged criminal violations and the company owes tens of billions of dollars to lenders, contractors and suppliers.
Residential sales remain under pressure in spite of various stimulus measures by the Chinese government, including lower mortgage down-payment requirements and lower interest rates.
Most economists expect China's economic growth to improve in the final quarter of the year after six months of weakness. China lifted its coronavirus control measures around the beginning of the year, leading to a surge in pent-up consumer demand that soon petered out. Government efforts to stimulate the economy appear to have helped stabilize growth, but many economists believe more policies are needed to support the economy, perhaps in the form of tax cuts, subsidies or other direct help for households, or stronger intervention in the real estate sector to get unfinished projects completed and restore battered confidence.
"We believe further recovery in consumption and services will require more policy easing, especially given the ongoing downturn in the property sector and still-battered confidence," economists at Goldman Sachs said in a research note on Sunday.
Other data from this year's double Golden Week reinforced the sense that holiday spending was weaker than expected. According to the National Immigration Administration, the average number of inbound and outbound travelers during the Golden Week holiday in China reached 1.5 million per day, a threefold increase from the same period in 2022, but about 85 percent of the usual pre-pandemic level. It was much harder for people to get around this time last year.
According to Dengta, a movie data tracking platform, box office revenue for this year's National Day movies reached 2.7 billion yuan ($375 million), higher than the same period in 2022, but the average daily box office revenue was lower than the National Day level in 2021.