China’s powerful policy combination punches to save the market, China’s “Golden Week” consumption report card is impressive

In recent years, China’s economy has been sluggish in domestic demand, the stock and housing markets are sluggish, and there are more deflation concerns recently. Against this background, the Chinese government has introduced a series of policies to stimulate the stock market and stabilize the housing market through a variety of financial policies and loosening measures, and ensure that this year’s 5% growth target is achieved.

After the People’s Bank of China, the State Financial Regulatory Bureau and other departments announced real estate-friendly policies such as interest rate cuts and reserve requirement ratio cuts, and reductions in existing mortgage rates on September 24, China’s heavyweight financial “combination punch” in the real estate market finally landed. The People’s Bank of China, together with the Financial Regulatory Bureau, issued four more policies to stabilize the real estate market on the evening of September 29, including guiding banks to reduce existing mortgage rates, unifying the minimum down payment ratio for mortgages to 15%, extending the deadlines of some real estate financial policy documents, and strengthening the policy of refinancing for affordable housing.

Half a month after the policy was implemented, China’s stock market and housing market became hot, which to a certain extent affected people’s consumption decisions. According to consumption data released by the Ministry of Culture and Tourism of China, the National Day in 2024 will be the one with the strongest consumption capacity in China in recent years.

On October 8, at a press conference held by the Information Office of the State Council of China, relevant leaders clearly stated that “the market consumption during the just-concluded National Day holiday was strong”. On the same day, the data of “Cultural and Tourism Market Situation during the National Day Holiday in 2024” released by the Ministry of Culture and Tourism showed that during the 7-day National Day “Golden Week” in 2024, 765 million people traveled domestically in China, a year-on-year increase of 5.9% on a comparable basis, and an increase of 10.2% over the same period in 2019; the total expenditure of domestic tourists on travel was 700.817 billion yuan, a year-on-year increase of 6.3% on a comparable basis, and an increase of 7.9% over the same period in 2019.

This year’s National Day Golden Week tourism revenue hit a new high, and per capita consumption increased to 916 yuan, becoming the “strongest National Day holiday” in history. Data from major Chinese online platforms showed that the consumption “report card” was impressive.

Booking data from the travel platform “Qunar” showed that after the stock market surged, on September 27, the number of hotel reservations for stays during the National Day jumped 19% from the previous day, far exceeding the single-day increase during the National Day booking window period. Tongcheng Travel’s data also shows that the popularity of long-distance outbound travel bookings rose rapidly in the week before the National Day holiday. Air ticket prices to long-distance destinations such as Europe, Africa, the Middle East, and North America generally rose, and the popularity of air ticket bookings to popular destinations increased by more than 100%.

On October 7, Ctrip Travel released the “2024 National Day Tourism Consumption Report”. The average daily order volume of outbound and inbound travel on the Ctrip platform exceeded that of 2019, setting a record high. The consumption data released by Meituan during the Golden Week showed that the national in-store consumption of life services increased by 41.2% year-on-year, and the average daily consumption of tourists increased by 69.6% year-on-year compared with the previous holiday.

The “2024 National Day Holiday Travel Express” released by Fliggy also showed that the booking volume of domestic high-star hotels, route tours, car rentals and other tourism products increased significantly year-on-year. Outbound travel continued to grow rapidly on the basis of last year’s strong rebound, with bookings increasing by more than 50% year-on-year, of which the scale of international hotel bookings has recovered to about 120% of 2019.

Throughout the entire National Day holiday, high-value consumption seemed to have returned overnight. With a thriving consumer market, there is reason to believe that the Chinese government’s package of economic stimulus measures has been effective, and that China’s economy has stabilized and rebounded, with fundamentals improving.