All eyes are on China as it celebrates its top holiday, Lunar New Year, to measure whether its beleaguered economy has any juice after a post-Covid rebound failed to materialize.
Robust Domestic Travel, But What About Consumption?
State media and the government are touting robust domestic travel. Indeed, train and plane tickets are sold out, and numbers released by the Ministry of Transport are on par with 2019.
But that says little about consumption.
A Time for Family, Not Vacation
Unlike many Western holidays, Lunar New Year is a time of returning home, visiting nearby relatives, and dining with family—not a vacation getaway to Thailand for a week. Few independent commenters—analysts, consumers—believe the spending will extend much further than the homebound travel itself.
The Changing Face of Lunar New Year Celebrations
"As people celebrate the Chinese New Year, sentiment seems weak," ING China analyst Lynn Song said in a note.
University graduate student Li Yuanyuan said she always celebrated the new year. A core part of that has been bringing hordes of local knickknacks for her cousins, and regional snacks for the family to consume and distribute to those she grew up with in her small town in Sichuan province.
"Everyone does it who moves away. It's a sharing of specialties from your area with the people you return to see," she said by phone from her hometown of Pengzhou, Sichuan.
"Some years I'd have an extra suitcase just for presents. This year, I just have a bag of local Zhejiang sausages," she said, referring to the beloved cured meats from the eastern province where she attends university.
Shrinking Gift-Bearing Traditions
Asked about the shrinkage in gift-bringing, she cited a number of reasons. "It's not what it was," she said, referring to the holiday atmosphere. "The mood seems uninspired," adding that "on top of that, my allowance was cut a bit this year."
Traditional Lunar New Year Gifts
Besides red envelopes stuffed with China's pink 100-yuan ($14) bills, gifts of choice during the new year are beverages—mostly the fiery alcohol baijiu—snacks such as nuts, fruits and candies, and vitamins and supplements that convey a sense of caring for the recipient's health.
At least 50% or more of respondents said they were bringing these gifts home, in a survey by iiMedia Research.
A Shift in Lunar New Year Celebrations Reflects China's Changing Economic Landscape
As Lunar New Year approaches, a cultural shift is taking place in China that reflects a changing economic landscape. Traditionally, the holiday season is marked by lavish gatherings, extravagant gift-giving, and dining out at fancy restaurants. However, this year, many families are opting for a more conservative approach, with less money being placed in red envelopes, simpler home-cooked meals, and a focus on spending time together rather than exchanging expensive gifts.
This shift represents a significant departure from the past few decades of rapid economic growth and prosperity in China. For years, the Lunar New Year festivities have been a reflection of the country's booming economy. But now, as China faces slower economic growth rates, people are feeling less secure in their jobs and are more cautious about their spending habits.
Jiang Wenlian, a student from Suzhou, commented on the changing dynamic: "If you live in a big city, most of your money goes towards rent. And if you own a house, that's your savings, and the values are dropping. It just makes sense that people are being more conservative with their spending during the Lunar New Year."
The shift is not limited to individual families' celebrations. Even the highly anticipated televised Spring Festival Gala, a spectacle that draws hundreds of millions of viewers each year, has undergone changes. Unlike previous years, where economic growth and prosperity were emphasized, this year's program highlighted cultural aspects and themes of national pride.
According to China international relations analyst Nick Carraway, this shift towards emphasizing civilizational discourse and cultural pride is a response to lackluster economic performance and ongoing decoupling from Western economies.
As China navigates its evolving economic landscape, this year's Lunar New Year celebrations serve as a poignant reminder of the changing times. Families are adjusting their traditions to reflect the current reality, embracing a more conservative approach to gift-giving and focusing on the true essence of the holiday - being together with loved ones.
