Chinese Consumers Spend $86 Billion Over Lunar New Year Holiday
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Chinese consumers rang in the Year of the Snake by spending over 539 billion yuan ($86.3 billion) from Lunar New Year’s eve until the 6th day of the Chinese New Year, showed data from the Ministry of Finance on Sunday, marking a 14.7 percent increase from the same period last year.
Chinese consumers rang in the Year of the Snake by spending over 539 billion yuan ($86.3 billion) from Lunar New Year’s eve until the 6th day of the Chinese New Year, showed data from the Ministry of Finance on Sunday, marking a 14.7 percent increase from the same period last year.
According to the People’s Daily, sales of food and beverage had increased by 9 percent and 11 percent respectively; while the gold, silver and jewelry industry saw a consumption peak, 38.1 percent higher than the previous year.
This year, apparel retailers also saw a significant increase in sales volume, 6.3 percent and 7.5 percent increases year-on-year for clothing and footwear respectively, though spending on luxury hotels and high-end food and drinks saw a massive drop – with expensive hotel rooms seeing a 20 percent decrease in occupancy from 2012.
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The pick-up in consumer spending also went in line with China’s latest economic figures, where the economy expanded by 7.9 percent in the final quarter of 2012, rebounding after seven consecutive quarters of slowing.
[quote]”We think consumption will be one of the key drivers of the Chinese economy this year. And the consumer should be stronger because of more confidence, faster economic growth and fast gains in incomes,” said Dariusz Kowalczyk, a senior economist at Credit Agricole in Hong Kong, to CNBC.[/quote]“Retail sales should be good and that should be reflected in the data we get for the Lunar New Year sales,” he added, during an interview on February 6th.
The Chinese New Year, also known as the Lunar New Year or Spring Festival, is celebrated throughout China and is one of the busiest holiday periods for both consumers and businesses.
Early this month, China’s central bank pumped a record 450 billion yuan ($72 billion) into the money markets as the demand for cash spiked ahead of the weeklong festivities.
Analysts say expectations for further increases in wages could strengthen consumption in the months ahead. According to official data, per capita income among urban households rose 12.4 percent in 2012 compared with a rise of just about 14 percent in 2011. The government also recently announced a plan to increase the national minimum wage to 40 percent of average urban salaries by 2015.
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“The rebound of 2008 was driven by manufacturing investment and what we’re seeing now is new growth in the Chinese economy coming from services,” told Emmerson Yip, a fund manager for Greater China at JPMorgan Asset Management in Hong Kong, to CNBC.
[quote]”Consumption sectors should see a turnaround in 2013, consumption at department stores, high- end luxury sales, all of these sectors should see a pick up this year,” Yip added.[/quote]
