China’s Golden Week Highlights Cautious Spending Despite Travel Surge

During the recent 13-day Golden Week holiday, which bridged the Mid-Autumn Festival and China’s National Day, approximately 31.19 million passengers traveled across the country. However, data indicates that while volume was high, consumer caution has returned, revealing a significant disconnect between travel activity and discretionary spending.

Ya Xi, a participant in the holiday rush, exemplified this trend. After returning to Shanghai on a budget red-eye flight from Southeast Asia, she told DW that she was willing to endure overnight travel to secure cheaper fares. “I earn less this year, so I’m lowering my budget,” said Xi, who is in her mid-20s. She allocated 5,000 yuan (approximately €660) for her flight—the single largest expense of her trip—while planning to economize in other areas.

Golden Week is widely regarded as a key indicator of economic health, with Beijing often using the period to demonstrate the spending power of the world’s second-largest economy. State media highlighted a record 25.204 million railway trips on October 1 alone. Despite these headline figures, analysts at Citigroup noted that early data pointed to moderate per-traveler spending and essentially flat passenger traffic growth. Over the first four days of the holiday, traffic volumes rose by only 0.1% compared to the previous year, a stark contrast to the 3.5% increase recorded during this year’s Labor Day vacation.

Lizzi C. Lee, a fellow at the Asia Society Policy Institute, observed that Chinese consumers are becoming increasingly selective. “My read is that people are willing to get out and spend. They’re just being much more careful about how much and what they spend on,” Lee said. She noted that while travelers may splurge on experiences such as concerts, dining, and technology if they perceive value, they aggressively cut costs elsewhere.

This pattern was evident in Xi’s travel itinerary. While she capped her meal budgets at 200 yuan (about €26) per sitting, she remained willing to prioritize food and social activities, adhering to an “eat, drink, and be merry” philosophy during her trip.

Guo-Chen Wang, an associate research fellow at the Chung-Hua Institution for Economic Research, described the shift toward budget travel as a sustained trend rather than a temporary anomaly. He pointed out that while the number of trips continues to rise, overall consumption remains under strain. Although the government distributed coupons worth over 310 million yuan (€41.2 million) to stimulate demand, Wang dismissed the measure as an outdated approach to a persistent issue.

The current spending environment echoes last year’s Golden Week, where average spending per trip fell to 911.04 yuan (around €121), marking the lowest level in three years. Wang argued that the root cause is not merely reluctance but an inability to spend. While bank savings have increased, he emphasized that the vast majority of these deposits are held by a small segment of the population, leaving most citizens without a financial cushion.

“The fundamental issue is the wealth gap in Chinese society,” Wang said. “I don’t know whether Beijing really neglected this problem or was simply unwilling to face it.”

A recent International Monetary Fund report, *Toward a New Economic Growth Model for China*, reiterated that domestic demand has remained weak since the pandemic, coinciding with a correction in the property market. Lee attributed the subdued spending to a broader confidence crisis, noting that the housing downturn has eroded household wealth and that years of weak prices have conditioned consumers to wait for discounts.

Additionally, new cross-border travel restrictions implemented on September 15—which prohibit citizens from leaving the country if deemed a risk to national, industrial, or technological security—had limited impact on outbound tourism volumes. Wang had anticipated a pivot toward domestic travel, but outbound numbers grew slightly rather than collapsing. Lee confirmed that the regulations allow authorities to verify travel purposes more closely but do not broadly chill ordinary overseas tourism.