Chinese consumers’ spending boomed during the seven-day National Day holiday in the first week of October, driven by huge demand for catering services and entertainment businesses, pushing forward the recent economic growth momentum. In the “Golden Week”, NetsUnion Clearing Corp, China’s national online payment clearinghouse, which operates under the supervision of the central bank, reported an increase in the number of online payments compared with the same period of last year. During the holiday, NetsUnion recorded total transactions of CNY7.6 trillion, and average daily payments were up by 20% year-on-year. The peak was recorded on October 1, with a daily payment volume of CNY1.23 trillion. Consumption of catering services rose fast, with the average daily online transactions increasing by 46.57% from a year earlier, NetsUnion reported. Online spending on movies and theme parks increased by more than 60% year-on-year.
China UnionPay, the nation’s largest bank card processor, also reported a rise in payments during the holiday. From October 1 to 6, total transactions through UnionPay’s platform reached CNY2.31 trillion, and the average daily transaction was up by 32% compared with a year earlier. Economists expected retail sales growth to rise slightly from September to October, as the recent wave of Covid-19 infections in the country has been controlled. Dominik Peschel, head of the economics unit of the Asian Development Bank Resident Mission in China, said: “We would expect household demand to recover further gradually, and this should also help the services sector. We would also see some pent-up demand because it has been difficult to travel and have a vacation for some time. We think that people will travel more and demand for services will rise once the Covid-19 situation is fully under control and the restrictions have been lifted.”
Economists with Bank of China (BOC) said China’s consumption still faces uncertainties caused by repeat cases of Covid-19 and is restricted by household income in the fourth quarter, but they also see favorable factors stimulating consumption recovery. “We are unlikely to see another Covid-19 outbreak that will affect consumption and entertainment nationwide. This is helpful for the recovery of several types of consumption, including tourism, lodging, catering, movies and exhibitions,” said the BOC economists. Backed by favorable policies, small and micro enterprises will hopefully maintain a positive momentum of recovery, which will help sustain a gradual recovery of employment and household income, the economists said. They expected that China’s consumption will grow by around 12.5% year-on-year in 2021, and the two-year average consumption growth will reach about 3.5%, the China Daily reports.
The Caixin China General Services Purchasing Managers’ Index came in at 53.4 in September, up from 46.7 in August, driven by a solid rise in sales and output.