China's CNY travel surge signals pickup in consumer spending

A resurgence in travel over the Chinese New Year holiday in China is offering some signs of a consumer spending pickup in the world's second-largest economy as it struggles with low confidence and deflation.

HONG KONG - More than 61 million rail trips were made in the first six days of the national New Year holiday, according to official reports.

That was the highest in data compiled by Bloomberg News in the past five years, and it marked a 61 per cent increase over the same holiday period in 2023.

"The Chinese consumer is beginning to stir," said Mr Frederic Neumann, chief Asia economist at HSBC Holdings, adding spending indicators had exceeded expectations.

He acknowledged, though, that surpassing 2023 was a "low bar" given the country was still contending with a rampant outbreak of Covid-19 at the time.

The travel data is welcome news for an economy struggling with concerns about growth in 2024 as the ongoing property crisis dents confidence and deflationary pressures persist.

Consumer prices dropped in January at the fastest pace since the global financial crisis, adding pressure on the government to step up support.

A multitrillion-dollar sell-off in Chinese stocks has underscored the economic gloom.