This year, the traditional New Year’s wish “Gong Xi Fa Cai” has a stale aftertaste as the economy is weakening and consumption is declining. This year, the people are encouraged to spend money as opposed to accumulating it, due to the sluggish economy. The Lunar New Year festival, known as Chinese New Year, is being celebrated by more than a billion people. The festival will last for a week, with schools and authorities remaining closed.
The festival is an opportunity for people to gather, light red lanterns, and exchange red envelopes containing cash and gifts. This is the first Chinese New Year without Covid-19 restrictions, which has heightened expectations. Instead of cash gifts, electronic credit on smartphones is increasingly being used for purchases. E-commerce platforms are offering special New Year discounts as an incentive for spending during the festival.
Although the Chinese economy grew by 5.2 percent last year and met the official goal, there are concerns about the real estate crisis and the slowdown of the export engine. Economic uncertainty is affecting the desire to shop, which is largely fueled by fears of a deflationary spiral. Additionally, the travel season, known as “Chunyun”, has increased by nine billion individual trips this year.
Instead of working, many people are travelling within China and abroad to places like Harbin, Japan, South Korea, and Thailand. Chinese group trips to Europe, including Austria, must wait until restrictions are lifted and the flight costs decrease. This expected surge in travel is adding to the consumer spending in the economy.