During the recent Lunar New Year celebrations, China’s consumer market showed signs of recovery, reducing the likelihood of extensive stimulus measures that investors anticipated. The holiday period, lasting nine days and concluding on February 21, 2026, saw increased spending across various sectors, including a record 18.7 million rail travelers in one day. Spending trends indicate that consumers are prioritizing experiences such as travel and entertainment over traditional goods.
Despite these positive indicators, the recovery remains cautious. While tourism trips increased by 5.7% compared to last year, spending growth slowed from 7% in 2025 to 5.5%. This reflects ongoing price sensitivity among consumers, leading to a 0.2% decline in average spending per tourist trip. The Chinese government has initiated measures to promote consumer spending, including extending the official holiday and providing local governments with funds for consumption vouchers and subsidies.
The National Bureau of Statistics recently revised its consumer price index to emphasize services, indicating a shift towards dining and social activities. Experts highlight that restoring consumer confidence in income and job security is critical for sustained consumption growth, rather than relying solely on shopping promotions. Policymakers are expected to build on the holiday momentum with targeted easing measures during the upcoming March Two Sessions, where Premier Li Qiang will outline economic priorities.
Additionally, H World Group reported high hotel occupancy rates in southern coastal cities, aided by duty-free sales in locations like Hainan, which saw significant year-on-year growth.
Why this story matters:
- Highlights the recovery of China’s consumer market post-pandemic.
- Shows the shift in consumer preferences toward experiences rather than goods.
Key takeaway:
- While spending is up, cautious consumer behavior persists, indicating a slow and careful economic recovery.
Opposing viewpoint:
- Some analysts suggest that the government’s focus on preventing consumption declines does not equal robust economic stimulus or recovery.
