Chinese holiday spending inches up but trade war weighs on services

BEIJING - Chinese travellers’ spending rose 8 per cent year-on-year during the May Day holiday to 180.27 billion yuan (S$32 billion),but was still off pre-Covid-19 pandemic levels, while the country’s services activity expanded at the slowest pace in seven months in April.

The May Day holiday, one of the country’s longest, is closely watched as a barometer of Chinese consumer confidence.

Consumption in the world’s second-largest economy has suffered amid a sputtering economy and prolonged property crisis, while the fallout from the US-China trade war is set to deepen the pain.

China’s tourism ministry recorded 314 million domestic trips during the holiday, an increase of 6.5 per cent, while the number of transactions using Weixin Pay, a popular payments app, rose by more than 10 per cent year on year, with a notable increase in restaurant spending.

But total spending per head over the five-day May holiday period, a typically busy time for family travel, rose just 1.5 per cent to 574.1 yuan, Reuters calculations based on official data showed.

It remains below 2019 levels when per capita spending was 603.4 yuan.

Cinemas suffered a significant drop in ticket sales, with the box office haul over the five-day holiday at 747 million yuan, only about half of the same period in 2024.

Growth slackening

Meanwhile, China’s services sector saw new order growth slacken from March, weighed by uncertainty caused by US tariffs, a private sector survey showed on May 6.

Despite stronger-than-expected economic growth in the first quarter, supported by government stimulus, China’s economy continues to face persistent deflationary risks.

The Caixin/SP Global services purchasing managers’ index (PMI),fell to 50.7 from 51.9 in March, its lowest reading since September. The 50-mark separates expansion from contraction.

This was broadly in line with China’s official survey, which showed services activity