Chinese officials are hoping that this year’s extra long lunar new year holiday will provide a boost to the country’s economy, where increasing domestic spending has been identified as a key priority for the year ahead.
The government expects a record 9.5 billion passenger trips to be made across China during the 40-day spring festival period, up from 9 billion trips last year. Hundreds of millions of people will be crisscrossing the country to make what is often their only trip home to see their families for the Chinese new year celebrations.
Although China is no longer the world’s most populous country, losing that title to India in 2023, China’s annual chunyun, or “spring transportation” is still the world’s largest mass migration of people.
The official lunar new year holiday will be nine days this year, rather than the typical eight, giving people a longer break to spend their holiday hongbao, red packets of cash given to relatives during the festive period. The holiday period runs from 15-23 February, with New Year’s Day falling on 17 February.
China will be ushering in the year of the horse, said to represent optimism and opportunity, following the year of the snake, a period that represents transformation akin to the reptile’s habit of shedding skins.
An article recently published by Jiangsu province’s propaganda department made the government’s hopes for the festive period clear: “Driven by holiday consumption, the spring festival cultural and tourism consumption month is leading the way in activating domestic demand”. The holiday would help to “unleash the surging vitality that propels China’s economy forward”, the department wrote, using an idiom that literally means “ten thousand horses galloping forwards”.
To help translate this astrological power into reality, the central government said it would issue more than 360m yuan ($52m) in consumer vouchers in February.
“There is no question that [lunar new year] provides a huge lift for retailers and providers of consumer services who might otherwise have had a pretty boring February,” said George Magnus, research associate at Oxford University’s China Centre.
But on a macro level, China’s economy still suffers from Chinese households saving an unusually large share of their income – around a third – while GDP growth is propped up by exports to other countries.
Last year, national retail sales, a metric for consumer spending, grew 3.7%, below the 5% overall GDP growth rate.
Boosting demand at home will be a priority of China’s next five-year plan, the economic planning document that will be approved by the country’s parliament in March. The Communist party has already said that it will be focused on “vigorously boosting consumption”.
In January, the national development and reform commission said it would be formulating an action plan to expand domestic demand over the next five years.
One area of opportunity is the service sector, such as elderly care, entertainment and healthcare, which grew by 5.5% last year. Those sectors are relatively undeveloped compared with consumer goods, meaning there is more room for growth.
The cinema is a particularly popular new year’s activity. Last year, Ne Zha 2, an animation about a demon child, was a runaway hit, earning 4.8bn yuan in its first week at the Chinese box office after a lunar new year release. It went on to earn more than 14bn yuan, becoming the best-performing film in Chinese cinema history.
It remains to be seen whether this year’s releases – the comedy-action film Pegasus 3 and Scare Out, a national security themed blockbuster – will replicate Ne Zha 2’s success.
One service that had a brief moment of popularity was offered by a delivery platform, UU Paotui. The courier services company recently launched a product called “proxy Chinese new year visits”. For 999 yuan ($145), a user could book someone to visit elderly relatives and perform the traditional kowtowing rituals that children do for their parents, while livestreaming the encounter to the customer. But after an outcry about the degradation of traditional rituals, the company withdrew the service.
Additional research by Lillian Yang
