China's economy maintains recovery momentum as consumption gains traction

BEIJING -- China's economy maintained recovery momentum as consuming activities gained traction and innovation pushed up industrial upgrading in the past half year.

In the three-day Dragon Boat Festival holiday from June 22 to 24, the world's second-largest economy saw a vibrant rebound in its tourism industry, with a total of 106 million domestic tourist trips made and 37.31 billion yuan ($5.16 billion) of tourism revenue generated in the period. The figures jumped by 32.3 and 44.5 percent year-on-year, respectively, according to the Ministry of Culture and Tourism.

Data from the civil aviation sector also showed a willingness to spend on traveling, as travelers have made over 230.65 million air trips in the first five months, up 139.9 percent compared with a year ago, said the Civil Aviation Administration of China.

"We have seen our operational effectiveness and total passenger revenue in the first half of the year surpass the levels in the same period of 2019," said one of China's major airlines, Hainan Airlines.

The average daily domestic flights operated by Hainan Airlines reached 669 in the first half of 2023, the same as the 2019 level; the average passenger load factor stood at 81.5 percent, and 34 international routes resumed operation, according to the company.

"In 2023, the domestic market is likely to exceed the 2019 level due to pent-up leisure and traveling demand after the epidemic, and the international market would gradually recover to pre-epidemic level during 2024 and 2025," said the airlines company, forecasting that its business would continue growing as China implements national strategies such as the Belt and Road Initiative and industrial upgrading.

Green and low-carbon consumption also become a prominent trend among Chinese consumers, with the new-energy vehicle (NEV) market a shining point. Local governments have taken a slew of policies, such as NEV purchasing subsidies and tax exemptions, to spur green consumption.

From January to May, some 1.05 million passenger vehicles whose prices are above 300,000 yuan were sold in China, up 35.1 percent year-on-year. Among them, NEVs sales reached 329,770, surging by 121.8 percent from a year ago, data from the China Passenger Car Association showed.

Meng Wei, the spokesperson for the National Development and Reform Commission, said in mid-June that the positive development trend of China's economy would remain unchanged in the long term, and the pulling effect of consumption on the economic upswing is expected to be further highlighted.

Meng also cautioned that the market demand is still insufficient, and the endogenous power of the economy still needs to be enhanced. "In the process of economic recovery, fluctuations are normal and temporary in some fields," Meng said when commenting on declines in some monthly economic indicators, including the purchasing managers' index for China's manufacturing sector and industrial profits.