CBN Special丨Entering Year of the Dragon: What does 2024 mean to Chinese economy?

Red lanterns, Chinese knots and dragon-themed decorations being seen everywhere, festive songs looping in almost every indoor area, billions of Chinese joining the world's largest human migration known as “chun yun”…

As these familiar, once in a year kind of scenes unfold, we can clearly see the Spring Festival approaches. The beginning of the Year of the Dragon falls on Feb. 10, 2024, which Chinese people believe would bring good luck and fortune as the Chinese dragon, or loong, is often regarded as auspicious, noble creature.

It’s also worth noting that in December 2023, the 78th United Nations General Assembly unanimously passed a resolution, officially listing the Lunar New Year as a UN floating holiday in its calendar of conferences and meetings from 2024.

According to Chinese Foreign Ministry, nearly 20 countries have designated the Spring Festival as a legal holiday, and approximately one-fifth of the global population celebrates the Lunar New Year in various ways, whichindicates an increasing global recognition of China's culture and its influence.

In less than 48 hours, we’ll officially usher in the Year of the Dragon. Are we in for a lucky, powerful year? Perhaps a record-breaking 9 billion domestic trips expected and a good start for consumption to ring in the new year will provide some hints.

Traveling rush

With a longer-than-usual Chinese New Year holiday, it is anticipated that the potential of China's travel market will be further unleashed.

China's railway network handled 81.55 million trips between Jan. 26 and Feb. 1, the first week of the Spring Festival travel rush. China State Railway Group estimates that a total of 480 million railway trips are expected to be made during this year's Spring Festival travel rush, surging 37.9 percent compared with the 2023 level.

According to the Ministry of Transport, around 9 billion people will travel between regions in China from Jan. 26 to March 5, a new record high and nearly triple the pre-pandemic level of 2019.

As the country braces for the largest annual human migration on the planet with a record trips expected, analysts projected a fresh consumption boom for the economy, which will not only give a boost to the world's second-largest economy, but also stimulate the confidence of enterprises to step up investment and innovation.

While most Chinese people are busy heading home for reunion, some have plans to take advantage of the holiday away from home.

As the Lunar New Year draws near, domestic tourists are booking getaways ranging from the snowy northern regions to the relaxing southern hot springs, with reservations soaring 600 percent on Chinese online travel agency Trip.com. The regional travel experience, which has evolved into a trend known as the "North-South Exchange," continues to attract visitors seeking unique and immersive journeys, it added.

While China's northern and southern attractions are in a tight contest to lure travelers during the holiday that runs from Feb. 10 to Feb. 17, some overseas destinations have also joined the "traveling carnival" by issuing visa-friendly policies and showing goodwill gestures. Among them, Singapore, Thailand and Malaysia may be the biggest winners after China recently announced the mutual exemption of visas with these countries.

Some European countries are also rising as popular choices for Chinese travelers thanks to the increasing numbers of flights, said travel agencies. According to travel portal Qunar, hotel bookings to Russia, Spain, Italy and France for the holiday have seen continuous growth on the platform, and hotel bookings for overseas destinations peaked around Jan. 10, while flight bookings peaked at the end of January.

Bookings on Trip.Com for trips to and from China over the Lunar New Year holiday have soared more than 900 percent compared with the year-earlier period.

The China Tourism Academy estimates that the number of outbound visits exceeded 87 million in 2023, a twofold increase compared with the previous year, and is projected to further jump to 130 million by the end of this year, allowing the Chinese economy to recover further and paving the way for more international flights and continuous optimization of visa policies.

Spending power to unleash

Chinese people traditionally open their wallets before or during the Spring Festival, buying costly items such as gold to convey good wishes for the new year. Sales figures indicate that the gold consumption frenzy has not been prevented by gold price hikes.

RMB-denominated gold prices have firmed at a high level in 2024, following a hike of 17 percent in 2023. Latest data from the China Foreign Exchange Trade System showed that the price of gold that is 99.99 percent or more pure stood at 479.11 yuan (about $67.4) per gram on Tuesday.

According to the China Gold Association (CGA), during previous years, the majority of Shenzhen's gold manufacturers had already closed for the Spring Festival two weeks ahead of the festival. However, this year the situation is different, with many factories planning to operate until only three days before Chinese New Year's Eve and will resume operations on the fifth or sixth day of the first lunar month, which indicates an increasing appetite for gold persists around the Spring Festival and is expected to extend throughout the first quarter of 2024.

Meanwhile, as the first major online activity to boost the country’s efforts in promoting consumption this year, this shopping season will integrate online promotion activities from various localities, e-commerce platforms and shops, and cater to consumer activities that are related to the Year of the Dragon.

According to data from Vipshop, China’s major online discount retailer, the sales volume of China-chic clothing featuring the Year of the Dragon theme had increased by 120 percent in the first week after the start of the shopping season compared with the week which preceded it, while the sales volume of sports sweaters with a Year of the Dragon theme surged more than three-fold month-on-month.

The bustle of the Spring Festival is not only due to material needs of people, but also because of public expectations toward long holidays as well as family reunions, which are part of the tradition for the festival. These expectations were released after three years of battling against the pandemic and translated into actual purchasing power, further contributing to the recovery of consumption.

Consumption was a significant growth driver in China last year. In 2023, the total domestic retail sales of consumer goods reached 47.15 trillion yuan ($6.57 trillion), up 7.2 percent on the previous year. Final consumption contributed 82.5 percent to the country’s GDP growth.

The three-day New Year's Day holiday has also signaled a good start for China's consumer spending recovery this year. Extending the strong momentum, the country's consumption sector - be it in cities or villages, online and offline, and in green spending or the silver economy - will continue to rebound robustly, with retail sales expected to exceed 50 trillion yuan ($7.04 trillion) in 2024, said Wei Jianguo, former Chinese vice minister of commerce and executive deputy director of the China Center for International Economic Exchanges.

All 31 provincial-level regions on the Chinese mainland have recently released their GDP growth targets for 2024 at between 4.5 percent and 8 percent, with the weighted average standing at 5.4 percent, indicating collective confidence in the nation's economic prospects and hinting at a year of steady recovery, just like "a dragon raising its head.”

Executive Editor: Sonia YU

Editor: LI Yanxia

Host: Stephanie LI

Writer: Stephanie LI

Sound Editor: Stephanie LI

Graphic Designer: ZHENG Wenjing, LIAO Yuanni

Produced by 21st Century Business Herald Dept. of Overseas News.

Presented by SFC

编委: 于晓娜

策划、编辑：李艳霞

播音：李莹亮

撰稿：李莹亮

音频制作：李莹亮

设计：郑文静、廖苑妮

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