China's domestic retail sales during the 2014 Spring Festival (Lunar New Year) holiday period reached 610.7 billion yuan (approximately 10.3 trillion yen), a 13.3% increase year-on-year. Due to the impact of the government's austerity drive, the growth rate fell below last year's 14.7%, marking the lowest level since the current statistical method began in 2005, according to the Ministry of Commerce.
The 2014 Spring Festival spanned seven days from January 31 to February 6. Luxury brands and high-end restaurants were most affected, showing a clear slowdown in sales. This is seen as a result of reduced consumption of high-end gift items due to the frugality campaign. High-end restaurants were also hit hard. Corporate spending declined, and ordinary citizens increasingly opted for more affordable establishments.
Meanwhile, digital home appliance consumption remained robust. In Hebei Province, sales of digital home appliances like mobile phones and computers by major companies doubled. Home appliance sales in Gansu and Hubei provinces increased by 61% and 26.3% respectively, suggesting a growing trend in rural areas of gifting digital home appliances like smartphones and tablet devices.
In December 2012, the Chinese Communist Party adopted the "Eight-Point Regulation" as part of anti-corruption measures for officials, promoting frugality and discipline. In March last year, the General Office of the State Council (central government) issued rules targeting central government departments, prohibiting gifts and banquet invitations paid for with public funds.
Chang Jian, an economist at Barclays Capital UK, stated in an online news article on Tencent Finance: "The austerity measures have led Chinese households to seek cheaper, more practical goods. While the growth rate of Spring Festival retail sales slowed, factoring in inflationary elements shows the decline narrowed." He analyzed that the consumer market remains resilient. The annual retail sales growth rate for this year is expected to be around 14%, exceeding last year's 13.1%.
Meanwhile, overseas travel demand remains strong. According to the National Tourism Administration, 4.725 million people participated in group overseas tours during the Spring Festival holiday, an 18.1% increase year-on-year. Japan and South Korea were particularly popular destinations for travelers from eastern regions like Shanghai. Japan's enduring popularity is further boosted by the favorable exchange rate, making shopping there feel more affordable.
Among Southeast Asian resort destinations, Thailand's Phuket and Indonesia's Bali are said to be popular.
