|DINNER TIME: Pictured is a sea food restaurant in Sanya, Hainan Province, on October 6 (HOU JIANSEN)|
During the Mid-Autumn Festival and National Day holiday from September 30 to October 7, about 425 million people—equivalent to the total population of North America—traveled the country, creating sales in the retailing and catering sectors in excess of 800 billion yuan ($127.04 billion). This sum is roughly 10 percent of South Korea or Mexico's GDP in 2011. The travel rush set a new record for China's eight-day holiday.
Despite China's slowing growth, booming sales during the holiday in China illustrates the potential for consumption.
The holiday reflected the dynamic nature of the economy. Transaction statistics released by China Unionpay (CUP), a financial organization that covers most Chinese banks, showed that the total inter-bank transactions with CUP cards increased by 41 percent compared with the same period last year. According to the Ministry of Commerce, major retailing and catering enterprises increased sales by 15 percent over last year. In 2011, the added value of the service sector accounted for 43.1 percent of the GDP; we are likely to see a higher rate this year.
The flourishing holiday economy raised employment. Scenic spots, transportation, hotels and restaurants had a strong need for service staff. Many enterprises were willing to pay more than usual to recruit new employees.
The number of tourists increased by 40.9 percent over the same period of last year, with crowded tourist attractions, gridlocked highways and packed airports, railway stations and shopping malls the norm during the week. Unprecedented crowds of visitors revealed shortcomings in the tourism industry. For example, the Huashan Mountain in Shaanxi Province attracted 27,000 visitors on October 3, leading to disorder at the famous scenic spot. Numerous visitors were stranded through the night on the top of the mountain. Other tourist sites fared no better. Hotels reached capacity, forcing some visitors to sleep in tents.
However, these problems show the potential for growth and further investment opportunities in the tourism sector.
China is currently carrying out income reform. Rising income will drive economic growth. Meanwhile, spending—from tourism to retail—will see a significant boost. Problems that exist now during holiday periods will be resolved gradually.
News we recommend:
Let the train, take the strain
Personal care market to keep growing
An Apple a day isn't keeping critics away
Global companies expand rapidly in China
Shanghai's 'other' market
China's tourism industry reaps golden harvest
Commentary:Asking the right questions
More Investment, More Woes?
All that glitters is gold