The May Day holiday in China has fueled a surge in travel and consumption, particularly in retail and catering. On the other hand, transactions on the real estate market in April were weaker and returned to the level of the previous month. Freight rates rose, but overall remained below the previous year’s level. Current data from Germany showed the weakness of China’s economy: both Germany’s imports from China and exports to China fell significantly.
The economy in China thus remains in the “mixed” mode, which meanwhile has a good chance of becoming the word of the year to describe the state of the Chinese economy.
Consumption during the May holidays in China: mixed
The main focus this week was consumption during the May bank holiday. Officially, the May vacation is three days long, but most white-collar employees have the opportunity to take a full week off. Fun fact: you have to work one day on the weekend before and one day after, so that you actually only have one day off. The expectation was that 120% more trips would be made and consumption should be boosted accordingly.
Increase in travel activity during the May holidays
According to data released late Wednesday by the Ministry of Culture and Tourism, a total of 274 million trips were made during this year’s May Day holiday, up 70.83 percent year-on-year and up 119 percent from 2019 on a comparable basis.
According to von Airport 14,100 domestic and international flights were operated on May 1, slightly higher than the 2019 level. When it comes to flights, however, the limiting factor continues to be the lack of crew members on domestic flights. Domestic tourism revenue was 148.1 billion yuan (21.43 billion U.S. dollars), the ministry said, slightly higher than 2019’s 100.66% of 2019’s level on a comparable basis, according to photos circulating on social media and videos, the tourist attractions were well attended.
Sales increase in retail and catering
During the May Day holiday in China, major retail and catering companies saw sales rise 18.9 percent year-on-year, according to data from the Ministry of Commerce. In particular, the sales of major food chains increased by 57.9 percent year-on-year.
According to data from delivery platform Meituan, daily online order volume increased by 133 percent in the first three days of the May holiday compared to 2019. The number of moviegoers also rose sharply during the long holiday. According to Chinese ticketing platform Maoyan, as of 1:00 p.m. Wednesday, box office income for the holiday hit 1.4 billion yuan (US$214.2 million), compared with 1.5 billion yuan (US$231.9 million). US dollars) in 2019.
Real estate market weaker again in April
After a cautious stabilization could be observed in the real estate sector in the last two months, the sector that is so important for China’s economy (approx. 30% of the GDP) showed itself to be in weaker condition again. April sales of China’s top 100 real estate developers fell 14.4% mom but rose 31.6% year-on-year, according to real estate research firm CRIC. Developer sales rose 9.7% year-on-year from January to April, accelerating in the first quarter.
Meanwhile, transactions for house space in China’s 30 largest cities fell 27% month-on-month in April, returning to February’s levels, according to real estate research firm CRIC. Year-on-year, transactions rose 37% in April but still remained significant below the level the same period from 2019 to 2021.
Freight rates increase slightly, but remain below the previous year’s level
Der Drewry World Container Index (WCI) for freight rates is up 1% this week. Prices on the Shanghai-Rotterdam route have increased by 3% or US$53 to US$1,645 per 40ft container. Prices on other routes such as Shanghai-Genoa and Shanghai-New York are up 2% to US$2,232 and US$2,829 per 40ft container respectively. However, prices on other routes such as Shanghai-Los Angeles, Rotterdam-Shanghai, Los Angeles-Shanghai, New York-Rotterdam and Rotterdam-New York remained at the same level as in the previous week.
The Composite Index is at $1,763.28 per 40ft container, down 77% from the previous week. Year-on-year, the index is down 77% and is now 83% below the September 2021 peak of $10,377. Although the index is 34% below the 10-year moving average of $2,688, what indicating a return to normal prices, it remains 24% higher than the pre-pandemic 2019 average prices ($1,420).
The shipowners’ measures are finally having an effect and the price is stabilising. In the last few months, massive amounts of container ships have been laid in the roadstead, thereby reducing the tonnage. However, the price would have to rise again in the next few months, since Christmas exports will be shipped to the USA and Europe from the end of May.
2023-05-05 00:59:48
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