Chinese people are traveling in larger numbers domestically as the nation’s key holiday season kicks off, a sign that the end of Covid Zero is giving way to a rebound in economic activity.
(Bloomberg) — Chinese people are traveling in larger numbers domestically as the nation’s key holiday season kicks off, a sign that the end of Covid Zero is giving way to a rebound in economic activity.
Some 34.7 million trips within the country were made by road, rail, water or air on Saturday, the first day of the Spring Festival travel rush, according to the Ministry of Transport. An additional 35.4 million trips were made on Sunday.
Each day is around 40% more than comparable days in 2022. Roughly 2.1 billion trips are expected over the entirety of the 40-day Spring Festival travel period, called Chunyun, said transport ministry Vice Minister Xu Chengguang — nearly twice last year’s amount.
The increase in travel — along with other mobility indicators showing a jump in subway usage and traffic congestion — bodes well for China’s economic outlook and suggests that the worst of the latest Covid wave may be over for major cities.
Economists have been upgrading their forecasts for China’s growth following the dismantling of Covid Zero. Barclays Plc last week lifted their gross domestic product growth projection to 4.8% for 2023 from 3.8% on a faster-than-expected reopening.
“Activities in China have recovered notably,” wrote Tommy Xie, head of Greater China research at Oversea-Chinese Banking Corp., in a research note Monday. He noted the widespread circulation of pictures of packed beaches in Hainan, a tropical island province in southern China.
“The congestion level in cities such as Beijing and Chengdu which were first hit by the Covid outbreak have recovered fully,” Xie said.
Traffic congestion in 15 major cities on Sunday climbed to 116% of the level seen in January 2021, according to an index compiled by BloombergNEF based on Baidu Inc. traffic data. The index tracks a seven-day moving average.
Subway usage in nearly a dozen major cities also continued to rise after hitting a low point last month, according to data compiled by Bloomberg. The number of daily subway passengers in 11 major cities jumped 20% for the week ended Jan. 8 as compared to the prior week.
What Bloomberg Economics Says …
High-frequency data signal the worst may be over for the virus surge that followed the end of China’s Covid Zero restrictions. Not all the indicators point up, but a jump in subway usage suggests activity is rebounding in big cities. Internet searches for the word “fever” also fell.
— David Qu, economist
Read the full report here.
There is still a ways to go before China returns to levels not seen since Covid hit. That gauge of subway passenger traffic for last week is still 24% lower than the same period in 2021. And passenger volumes on the first and second day of the holiday travel period were only around half of the numbers recorded in 2019, according to the transport ministry. By the end of the period, the total number of trips is expected to reach 70% of pre-pandemic levels, vice minister Xu said.
This year’s travel season contains the “most uncertainty” and is the “most complicated situation” of recent years, Xu said Friday. He cited the coinciding peak of travel and the pandemic as factors in that assessment, which he also said contains the “greatest challenges.”
While all preparatory work is “basically completed by now,” Xu said, he added that the ministry would continue to monitor the situation and optimize work as needed.
What Lunar New Year Treks Mean for China Covid Surge: QuickTake
–With assistance from Jinshan Hong and James Mayger.
(Updates with travel data for January 8.)
More stories like this are available on bloomberg.com
©2023 Bloomberg L.P.