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Jane Cai

Beijing resident Zhang Liang has been looking forward to the extended Labour Day holiday for a long time.
After working from home for three months as the coronavirus pandemic forced companies around the world to shut offices, Zhang is longing for a break.
Zhang, a 45-year-old business analyst with a multinational company, said he had been feeling the strain from the constant negative news, his lack of contact with friends and colleagues and the stress of trying to work at home with his son and daughter, whose kindergarten was closed.
But while the holiday may be a chance for some to make up for lost time away from home, Zhang has no big plans or expectations.
“After one month working at home I imagined having a holiday at the beach. Later, I just wished for a hotpot dinner at a restaurant or to get a drink at a bar,” he said.
“But as time passes by, I feel less and less like going out, spending money or doing anything.
“For the upcoming holiday, I guess I will just do fatherly duty and take the kids out to a park and then throw myself into bed and think of nothing.”
The five-day national holiday starts on May 1 and authorities are pinning high hopes on the holiday to unleash people’s purchasing power and reignite an economy that shrank 6.8 per cent in the first quarter – the first contraction in nearly three decades. But some analysts say the country should not bank on a bounce back in consumer demand.


China merged the one-day statutory holiday of May 1 with three days to make it a four-day holiday last year. This year, the break has been extended to five days to boost consumption.
As the coronavirus has subsided across much of the country, many local governments have reopened parks and sports venues and announced plans to give out vouchers for use in shopping malls. The Ministry of Commerce has also announced that there will be an online shopping festival from April 28 to May 10 to revive the beleaguered retail sector.
Hu Xingdou, an independent political economist, said China could expect some uptick in spending over the break but it might not be lasting.
“There’ll be some consumption rebound as people get time to relax during the holiday. But I doubt the measures will work well,” Hu said.
“People have been living in an austere environment for months, with their activities monitored, watched, and mobility restricted.
“With [psychological] depression taking hold and governments still trying to strike a balance between pursuing economic growth and maintaining social distancing measures to prevent the spread of the pandemic, the rebound in consumption will be limited,” Hu said.


During the Labour Day holiday last year, tourists made 195 million trips in China, and the country’s tourism revenue expanded 16 per cent from a year earlier to 117.67 billion yuan (US$17.5 billion). Cinema box office revenue over the period soared to more than 1.5 billion yuan – from about 990 million yuan in 2018.
But today, cinemas remain closed in most Chinese cities, and travel across provincial borders is not encouraged. Attendants at indoor venues, such as shopping malls and supermarkets, check the temperature of everybody entering, while restaurants have to rearrange tables and seats to ensure guests keep a safe distance.
Psychologists said the physical distancing measures and their influence on consumers were expected to temper the impulse to splurge during the holiday.
Li Tingya, a psychologist in Shanghai who has been volunteering her services to counsel people since the coronavirus erupted in January, said people were still in the process of getting back to their normal life.
“Some people are reluctant to go out fearing they might meet a virus carrier with no symptoms. Some just don’t feel like saying or doing anything after living alone for a long period,” Li said. “It’ll take time for them to pick up where they left off.”


Before the coronavirus outbreak, Chinese consumers were among the biggest spenders on the world’s most expensive houses, yachts, jewellery and overseas trips, thanks to China’s decades of robust economic growth.
Yu Lingna, a Chinese psychologist based in Tokyo, said the pandemic social distancing measures had probably brought competitive consumption to a halt.
“In the past, the mentality of keeping up with trends, leading fashion and showing off was an important factor behind the extravagant spending by Chinese consumers,” Yu said. “Social distancing will weaken this motivation for the short term.”
But China is unlikely to follow Japan and become a “low-desire society” where uncertainty about the future suppresses consumption in the long term. The urge to spend could return one or two years after people put the slump and social distancing behind them, according to the psychologist.
“There are economic reasons for the low-desire society in Japan … The pandemic alone will not plunge China into a low-desire society. Whether consumption will be sluggish for a long time depends on China’s economic prospects,” Yu said.

Many economists are not optimistic. As the pandemic took hold, China’s retail sales contracted 18.9 per cent in the first quarter, official data showed. Per capita disposable income fell 3.9 per cent in the first three months of this year, underscoring the bleak outlook for growth in private consumption.
“The anticipation of a sharp fall in income and more hardship ahead means consumption will likely be crowded out even more this year,” Julia Wang, senior economist with HSBC, wrote in a note earlier this month.
“The impact will likely be broad-based.
“On average, food, clothing and education have the lowest sensitivity to income change and hence are more resilient. Others, such as travel, telecom, and durable goods, are more discretionary, and may lose out more.”
Zhang, the business analyst, said he was negotiating a pay cut with his domestic helper after hearing rumours that both his company and his wife’s were likely to announce lay-offs soon.
“I’m not in the mood to think about consumption,” he said. “It’s a time of turbulence.”



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Coronavirus pandemic

China’s coronavirus blues clouds hopes for Labour Day holiday spending spree

China is hoping its consumers will be keen to spend during the extended Labour Day break that starts on May 1. Photo: EPA-EFE

People wearing facemasks amid concerns over the COVID-19 coronavirus queue to get their temperature checked before entering a shopping mall in front of an Adidas retail store (back) in Beijing on April 19, 2020. - China's economy shrank for the first time in decades last quarter as the coronavirus paralysed the country, in a historic blow to the Communist Party's pledge of continued prosperity in return for unquestioned political power. (Photo by NICOLAS ASFOURI / AFP)

Coronavirus: Chinese consumer sentiment still reeling from pandemic, hitting hopes of ‘revenge shopping’

Businesses are struggling to get back on their feet after the coronavirus outbreak led to widespread lockdowns in China. Photo: Reuters

China's economy shrank for the first time in decades the first quarter as the coronavirus paralysed the country. Photo: AFP

Coronavirus: China’s consumers push back against price increases as firms seek to offset Covid-19 impact

In the middle of March, the chain reopened its doors after being shut since late January due to the coronavirus outbreak, but customers were shocked to see prices had jumped by around 6 per cent. Photo: Simon Song

In the middle of March, the chain reopened its doors after being shut since late January due to the coronavirus outbreak, but customers were shocked to see prices had jumped by around 6 per cent. Photo: Reuters

Coronavirus: China’s capital city struggles to get back to normal amid continued outbreak worries

Photo: In the high-end shopping district of Guomao in Beijing, shops also remain closed as there are few potential customers. Photo: Getty Images

China’s continued pandemic prevention measures, coupled with still hesitant consumer demand, will inevitably lead to persistent limitations on the nation’s economic recovery, analysts said. Photo: Bloomberg

Coronavirus: Chinese tourist trips during Labour Day weekend to drop by half

After months of lockdown due to the coronavirus, travel restrictions are easing in China, but many people are choosing to stay close to home during the five-day holiday which begins on May 1. Photo: AFP

News

China

People & Culture


The government has extended the annual break to give an extra shot in the arm for the economy after months of lockdowns
But with still more uncertainty ahead, the country’s consumers might not be in the mood to splurge, observers say



The government has extended the annual break to give an extra shot in the arm for the economy after months of lockdowns but with still more uncertainty ahead, the country’s consumers might not be in the mood to splurge.


Coronavirus China

Coronavirus pandemic: All stories

Consumers

China’s coronavirus blues clouds hopes for Labour Day holiday spending spree

The government has extended the annual break to give an extra shot in the arm for the economy after months of lockdowns But with still more uncertainty ahead, the country’s consumers might not be in the mood to splurge, observers say

The government has extended the annual break to give an extra shot in the arm for the economy after months of lockdowns

But with still more uncertainty ahead, the country’s consumers might not be in the mood to splurge, observers say