During the May Day holiday, Chinese travelers increased their spending by 8% year-on-year, amounting to 180.27 billion yuan ($24.92 billion). Despite this rise, spending levels remain below those experienced before the COVID-19 pandemic. The May Day holiday is considered a critical indicator of consumer confidence in China.
Consumption in the country has faced challenges due to sluggish growth and a prolonged property crisis, compounded by the impacts of the U.S.-China trade war. The tourism ministry reported 314 million domestic trips during the holiday, representing a 6.5% increase. Additionally, transactions made using Weixin Pay, a popular mobile payment app, saw a growth of over 10% year-on-year, particularly in restaurant expenditures.
Notably, about 10.9 million individuals traveled in and out of the country during the five-day holiday, marking a 28.7% increase from 2024, with foreign visitors making up 1.1 million of that total. Nevertheless, per capita spending during the holiday only rose by 1.5% to 574.1 yuan, which remains below the 2019 figure of 603.4 yuan. The cinema sector also experienced a significant decline, with box office revenues at 747 million yuan, nearly half of what was recorded in 2024.
In tandem with these spending trends, the services sector is showing signs of slowing. The Caixin/S&P Global services purchasing managers’ index (PMI) dropped to 50.7 from 51.9 in March, indicating the slowest growth since September. The survey underscores that concerning U.S. tariffs continue to impact economic activity across China, leading to reduced business sentiment and job cuts in the services sector.
Economists suggest that greater support for services consumption and restoring consumer confidence are essential to encourage spending and stimulate economic growth.