HONG KONG - A resurgence in travel over the Chinese New Year holiday in China is offering some signs of a consumer spending pickup in the world’s second-largest economy as it struggles with low confidence and deflation.

More than 61 million rail trips were made in the first six days of the national new year holiday, according to official reports.

That was the highest in data compiled by Bloomberg News in the past five years, and it marked a 61 per cent increase over the same holiday period in 2023.

“The Chinese consumer is beginning to stir,” said Mr Frederic Neumann, chief Asia economist at HSBC Holdings, adding that spending indicators had exceeded expectations.

He acknowledged, though, that surpassing 2023 was a “low bar” given the country was still contending with a rampant outbreak of Covid-19 at the time.

The travel data is welcome news for an economy struggling with concerns about growth in 2024 as the ongoing property crisis dents confidence and deflationary pressures persist.

Consumer prices dropped in January at the fastest pace since the global financial crisis, adding pressure on the government to step up support.

A multitrillion-dollar sell-off in Chinese stocks has underscored the economic gloom.

Some initial data on road and air trips during the holiday also showed improvement over 2023, Chinese state media reported.

Hotel sales on Chinese e-commerce platforms surged more than 60 per cent from a year earlier, according to media reports citing the Ministry of Commerce.

The average daily consumer spending on Meituan’s online platforms during the holiday period jumped some 36 per cent from the same period in 2019, according to Shanghai Securities News, citing a report from the delivery giant.

The report did not give the actual value of consumption.

The travel and spending bright spots have helped boost market sentiment in Hong Kong this week, where markets reopened on Feb 15 after a holiday break.

A gauge tracking shares of Chinese companies listed in the city has risen for two consecutive sessions, clocking a 2 per cent gain through the end of trading on Feb 15. China Tourism Group Duty Free has jumped about 9 per cent, while travel platform Trip.com Group gained 4.7 per cent.

Meituan and e-commerce firm JD.com rose 6 per cent higher.

More muted initial box office receipt data, though, suggested that consumers may be reducing their spending per trip.

Chinese cinemas took in 4.48 billion yuan (S$847 million) in the first four days of the eight-day holiday period – down about 2 per cent from 2023, according to Bloomberg calculations based on data from Maoyan Entertainment.

Thriftier holiday spending was a pattern seen during national holidays in 2023 in China. While travel surged above pre-pandemic levels, spending per person fell as consumers sought out cheaper deals.

The Chinese New Year – the most important holiday in China and one of a handful of week-long events that see hundreds of millions of people travel to see family – is a key barometer for consumption early in the year.

The holiday in 2024 is one day longer than 2023’s.

China is expected to release comparable tourism spending data at the end of the holiday period, providing the best measure of consumption growth.

Consumer confidence in China has been weak for a range of reasons, including declines in home prices. Sales of some goods such as cars have also lost steam: Passenger car sales fell 26 per cent in January compared with December, according to the China Association of Automobile Manufacturers.

While travelling is the “main theme” of 2024’s Chinese New Year holiday, “it is uncertain if this can fully offset the consumption shift away from durable goods, and the downgrade trend for some residents”, said Mr Gary Ng, senior economist at Natixis. “The extra spending cannot replace traditional big-ticket items, like vehicles.” BLOOMBERG