Lunar New Year: China's tourism spending tops pre-Covid levels

Tourism spending in China during the Lunar New Year has risen above pre-Covid levels, according to official data.

Domestic tourism spending reached 632.7 billion yuan ($87.96bn; £69.7bn), up about 47% compared to the same holiday period last year, according to government figures.

The celebrations come after years of pandemic lockdowns and restrictions that were lifted in early 2023.

Data was also increased as it was a day off than usual.

Figures for the start of the Year of the Dragon show 474 million domestic trips were made during the eight-day break that ended on Sunday. This was 34% higher than last year and 19% higher than pre-pandemic levels in 2019.

Although officials did not give a breakdown of the data, calculations based on official figures show that the average cost of each trip has dropped by around 9.5% compared to 2019.

„Consumption cuts are still widely seen,” analysts at US investment banking firm Goldman Sachs wrote in a note.

The holiday, known as the Spring Festival in China, is the largest annual migration in the world.

Traditionally, hundreds of millions of people return to their hometowns in China to reunite with family members or visit tourist destinations around the country.

During the pandemic, major celebrations were canceled and travel was banned.

The increase in overall Lunar New Year spending represents some rare good news for the world's second-largest economy, which faces a number of challenges.

An asset market crisis, weak exports and worries about falling consumer prices or deflation are among the most pressing issues Beijing is grappling with.

Meanwhile, investment by foreign businesses in China last year rose to the slowest rate in three decades, official data released on Sunday showed.

Foreign direct investment (FDI) has fallen to its lowest level since 1993, the state's foreign exchange administration said.