The Chinese New Year (CNY) holiday is big for retail sales. Extending from February 9 to 15, CNY was big this year, climbing 14.7 per cent from last year’s holiday.”During the week, there were 203m tourists (up 15.1% yoy) and tourism income totaled RMB117.1bn (up 15.4% yoy); 440mn passengers travelled by public transportation (up 13.7% yoy),” wrote BofA Merrill Lynch Economists Xiaojia Zhi and Ting Lu. “These strong holiday sales data reflects that China’s ordinary consumers have remained confident in China’s economic fundamentals and their wealth outlook, in our view.”
This, however, was the slowest pace of growth since 2009, reports Bloomberg.
This deceleration has been attributable to the Chinese government’s demands for a cutback in luxury and wasteful spending. Earlier this month, luxury commercials were banned in an effort to curb corrupt gift-giving.
Nevertheless, this doesn’t appear to be an economic backbreaker.
“Moreover, though we believe Xi’s call on frugality is positive for the economy as a whole, those wasteful spending should be too small a fraction of the total retail sales to make a material impact on growth, and the anti-corruption campaign will not likely dampen China’s overall consumption demand,” wrote zhi and Lu.