China's Economic Balancing Act: Navigating Post-Pandemic Challenges

Spending by Chinese travelers increased 8% year-on-year during the nation's May Day holiday, reaching 180.27 billion yuan ($24.92 billion). Despite the rise, the figure still lags behind pre-pandemic levels, underscoring persistent economic challenges.

Consumption in China's vast economy is heavily impacted by the ongoing property crisis and the lingering effects of the U.S.-China trade conflict. Over the holiday, domestic tourism saw a 6.5% rise in trips, but this did not translate into significant spending increases, with per capita spend growing by only 1.5% to 574.1 yuan, according to Reuters' calculations based on official data.

Meanwhile, China's services sector growth experienced a slowdown, affected by uncertainties from U.S. tariffs, according to a private sector survey. The services PMI fell to its lowest since September, signaling broader economic struggles. Despite this, experts like Zichun Huang suggest a need to boost consumer confidence and restore economic momentum.

(With inputs from agencies.)