Posted by: Bruce Einhorn on October 7, 2009
China is in the midst of its eight-day holiday to celebrate its National Day. Golden Weeks like this (there’s another at Chinese New Year) provide many Chinese with the only chance they have to travel around the country and are therefore important indicators of the state of consumer demand in the domestic economy. And with so many economists saying the global crisis demonstrates the need for China to shift its economy away from its focus on exports and instead toward a greater reliance on consumption, this Golden Week takes on even more importance.
So how are things shaping up so far? Economists at BoA-Merrill Lynch have just come out with a report looking at the first few days of the holiday – and the verdict is upbeat. “So far, all statistics and anecdotal evidence point to robust consumer spending in the Golden Week despite strong headwinds,” write Ting Lu, T.J. Bond and Xiaojia Zhi. Some evidence: According to a Ministry of Commerce survey of 1,000 retailers nationwide, sales during the first three days of the holiday rose 15% year-on-year to $2 billion; electronics retailer Suning reported a 25.8% increase in sales in Beijing during the same time period and auto sales almost doubled in Guangzhou. And the Merrill economists are optimistic that the rest of the week will be a good one for retailers, too, arguing that many Chinese curtailed their shopping on October 1 to watch the big 60th anniversary parade in Beijing.