Shanghai and other parts of China remained closed or restricted to travel during the long holiday weekend in early April, bringing the official figure for tourism revenue down to just over a third. than before the pandemic.
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BEIJING – As mainland China faces its worst Covid-19 outbreak in two years, a measure of consumer spending has fallen to levels not seen since the initial shock of the pandemic.
Travel restrictions and lockdowns by counties or cities discourage people from traveling during an official holiday that runs from Sunday to Tuesday.
And travel spending by those who have ventured has recovered by just over a third, or 39.2%, compared with levels seen during the 2019 holiday season, according to the Ministry of Culture and Tourism.
It’s a much slower pace than during the Lunar New Year holiday, when spending on tourism by 56.3% compared to 2019.
In more than three weeks, the number of symptomatic Covid cases in mainland China has reached 1,000 a day and is reaching areas across the country. The number of asymptomatic cases is much higher.
Shanghai, the country’s largest city, has been one of the hardest hit in China’s wave of highly contagious omicron variants. The city was supposed to end its two-part lockdown on Tuesday, but earlier this week did not say when the restrictions would be lifted.
Markets may underestimate economic damage [from Covid].
Ting Lu
China’s chief economist, Nomura
In total, about 193 million people are living under full or partial lockdown, in regions that account for about 22% of China’s GDP, Nomura chief economist Ting Lu estimated in a report. report on Tuesday.
“Markets may be underestimating the economic damage,” he said. “Of China [zero-Covid strategy] can save many lives, especially the elderly, but it also entails a significant economic cost and collateral damage for those who cannot receive normal medical treatment because of diseases other than Covid. “
“Unlike in the spring of 2020, when there was general belief that Covid-19 would end by the summer, we do not currently see an end in sight; this has increased uncertainty, which quite negative for investment,” said Lu.
The number of cases and deaths from Covid in mainland China is still lower than other major countries. Major factories in the country have been able to maintain production by keeping employees in place, with economists expecting the service industries to remain the most affected.
Shanghai Disney The resort, which has been closed for more than two weeks, said Wednesday its theme parks and hotels remain closed until further notice.
The ministry said that tourism revenue during the most recent long weekend holiday fell 30.9 percent year-on-year to 18.78 billion yuan ($2.93 billion). According to the data, tourist trips by tourists fell 26.2% year-on-year to 75.4 million, or 68% from pre-pandemic levels.
According to booking site Trip.com, people who can travel on vacation mostly book trips to nearby scenic spots or the countryside.
In a country where online shopping is prevalent, Covid also incurs a package delivery fee.
According to the State Postal Service, the number of packages received and delivered during the holiday season is down about 13% from a year ago. It remains unclear whether logistics issues or consumer demand are the main cause of the drop.
Optimism of service companies drops
The Caixin Services Purchasing Managers’ Index (PMI), a gauge of market conditions, showed on Wednesday that Business activity in the sector fell in March at the fastest pace in two years.
“Businesses frequently mention that stricter virus containment measures disrupted operations and impacted customer demand in March,” Caixin said. For the third month in a row, data shows service companies are reluctant to hire more staff.
Service businesses in general remain optimistic about growth in the next 12 months. But the statement said optimism had fallen to its lowest level since the second half of 2020 “amid concerns about how long business activity will be affected by the pandemic and the war in Ukraine.”
