Chinese golden week sending out mixed signals5 October, 2012, 15:31. Posted by Zarathustra
The golden week is coming to an end on Sunday, and we will finally be (hopefully) relieved of the boredom of having seemingly nothing happening.
Of course, things are happening. Golden week is traditionally a strong season for retail sales, property sales, etc. With the economic slowdown, this particular golden week is getting attention from the market as to how the economy is really up to.
The signals we get so far is pretty mixed. Yesterday, we were hugely unimpressed by the seemingly robust tourism data, largely because it could be distorted by the fact that highways fees are waived and entry fees for some tourists attractions are forced to be reduced by the government.
In Haikou of Hainan province, sales at duty-free shops increased by more than 90% for items below RMB5,000 according to 21st Century Business Herald.
However, in Hong Kong, however, luxury sales have been stalling for a while, and is probably falling for this Golden week. According to Bloomberg:
Shoppers from China’s mainland curbed spending at Hong Kong luxury stores during the Golden Week holiday, reflecting growing pressure on the city’s economy from faltering tourist demand.
Purchase of luxury goods by mainland visitors in Hong Kong is set to fall at least 10 percent from a year ago during this week’s holiday, said Joseph Tung, executive director of the Travel Industry Council. The decline comes even as the number of tourists coming from China increases.
While Chinese tourists might be stopping to visit Japan, they are going to Korea, and spending money in Gangnam
style, as well as booking cosmetic surgeries, also in Gangnam style, according to China News.
Meanwhile, the picture from the property market seems mixed. After the rebound in activities during the summer, we have noted that sales activities in September seems to have softened slightly. Sales during the Golden Week, however, are mixed according to Xinhua. The real estate market of Shenzhen and Hainan, for instance, appear to be quite relatively quiet, while some in the 3rd tiers cities appear to be more active as developers cut prices more aggressively.
On the whole, anecdotes and figures for the week so far are painting a mixed picture as far as the Chinese economy is concerned. For the time being, we don’t think we would read much into these.