What’s going on here?
China’s revelers traveled more this Lunar New Year than last, which could finally get the country moving in the right direction.
What does this mean?
China’s shoppers and travelers have been discovering their thriftier sides lately, eager to keep cash aside in case the economy stays on the slide. But the Lunar New Year brought them back to old habits, with locals making 61% more train trips during the first six days of the holiday than last year. Early indicators seem to show more traffic in the road and skies as well, while the country spent 60% more on online hotel bookings than last year. Although it’s true, Covid lockdowns meant last year wasn’t hard to beat. That said, folk did spend an average of 36% more on Meituan – a one-stop-shopping platform selling everything from dinners to travel to cinema tickets – every day compared to the pandemic-free holiday period of 2019.
Why should I care?
Zooming in: China’s on a budget.
The Lunar New Year is China’s biggest holiday, drawing hundreds of millions home to celebrate with family. That makes it a telling indicator of folks’ financial confidence: if they can afford to spend and travel, they will. There’s an emphasis on “spend”, though. Chinese travelers moved around on a budget last year, so even though they took as many journeys as before the pandemic, they spent far less. If they were just as frugal this year, then all that traveling might not pay off – literally – for the economy.
The bigger picture: Analysts are window shopping.
Mind you, Wall Street reckons China has something going for it either way. Analysts believe that China’s chipmakers will become bigger and better now that the US has banned chip exports, not least because the Chinese government is funneling cash into local producers. Wall Street’s already picking favorites, eyeing up companies like Naura Technology Group and Hygon Information Technology.
—
Originally Posted February 16, 2024 – On The Rails
Disclosure: Interactive Brokers
Information posted on IBKR Campus that is provided by third-parties does NOT constitute a recommendation that you should contract for the services of that third party. Third-party participants who contribute to IBKR Campus are independent of Interactive Brokers and Interactive Brokers does not make any representations or warranties concerning the services offered, their past or future performance, or the accuracy of the information provided by the third party. Past performance is no guarantee of future results.
This material is from Finimize and is being posted with its permission. The views expressed in this material are solely those of the author and/or Finimize and Interactive Brokers is not endorsing or recommending any investment or trading discussed in the material. This material is not and should not be construed as an offer to buy or sell any security. It should not be construed as research or investment advice or a recommendation to buy, sell or hold any security or commodity. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.
