Shanghai and other parts of China were under lockdown or travel ban on long holiday weekends in early April, dropping more than a third of what it was before an official census of tourism revenue.
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BEIJING – As mainland China battles its worst Kovid-19 outbreak in two years, a measure of consumer spending has plummeted since the initial outbreak of the epidemic.
Travel bans and district or city lockdowns discouraged people from traveling on holidays that officially run from Sunday to Tuesday.
And according to the Ministry of Culture and Tourism, tourism spending in 2019 was only one-third, or 39.2%, of those who took the initiative.
This is much slower than the lunar New Year holiday at the beginning of the year, when tourism spending was 56.3% higher than in 2019.
For more than three weeks, the number of covid cases, including those of mainland China, has exceeded 1,000 a day and touched regions across the country. The number of asymptomatic patients is much higher.
Shanghai, the country’s largest city, has been hit the hardest by China’s wave of highly transmissible Omicron variants. The metropolis was due to end a two-part lockdown on Tuesday, but gave no indication of when the restrictions would be lifted earlier this week.
Markets can devalue economic losses [from Covid].
Nomura, China’s chief economist
In all, about 193 million people in the country are living in complete or partial lockdown, in an area that accounts for about 22% of China’s GDP, Nomura’s chief Chinese economist Ting Lu estimated in a report on Tuesday.
“Markets can devalue economic losses,” he said. “Chinese [zero-Covid strategy] It can save a lot of lives, especially in the elderly, but it also carries a significant economic cost and a parallel loss to those who are unable to afford normal treatment for illnesses other than covid. “
“Unlike the spring of 2020, when there was a general belief that the Covid-19 would end in the summer, we do not see any end at present; This has increased the uncertainty, which is quite negative for investment, ”Lu said.
The death toll from Kovid in mainland China is lower than in other major countries. While the country’s large factories have been able to maintain production by keeping workers on site, economists expect the service industries to suffer the most.
Shanghai Disney Resort, which has been closed for more than two weeks, said on Wednesday that its theme parks and hotels would remain closed until further notice.
Tourism revenue for the latest long weekend fell 30.9% to 18.78 billion yuan ($ 2.93 billion) from the same period last year, the ministry said. According to the data, tourist travel decreased by 26.2% from the same period last year to 75.4 million or 68% of the previous level of the epidemic.
According to booking site Trip.com, those who were able to travel during the holidays mostly booked for sightseeing in nearby or in the countryside.
In a country where online shopping is prevalent, Covid has also affected package delivery.
According to the State Post Bureau, the number of each package received and delivered during the holidays decreased by about 13% compared to a year ago. It was not immediately clear whether logistical snags were the primary cause of the drop in consumer demand.
A measure of market conditions, the Caixin Services Purchasing Managers Index (PMI), showed on Wednesday that business activity in the sector contracted at its sharpest pace in two years in March.
“Traders have often noted that strict virus control measures have disrupted operations and weighed on client demand in March,” Kaixin said in a release. For the third month in a row, data showed that service companies were reluctant to hire more staff.
Service businesses were generally optimistic about growth over the next 12 months. However, the release said that the level of optimism has dropped to its lowest level since the second half of 2020 “amid concerns over how long the business will be affected by the epidemic and the war in Ukraine.”