Luming Literature： Consumption upgrading and downgrading coexist. How to interpret the new economic trend in China？
After the Spring Festival, people’s life has gradually returned to daily life. As an important window to observe the annual consumption trend, the just-past Spring Festival in the Year of the Loong in 2024 once again continued the consumption boom, and both tourism data and movie box office set a new record, reaching a record high.
In addition, the Spring Festival tourism presents the characteristics of combination, diversification and individualization of cultural tourism. What enlightenment and experience does this bring to the cultural tourism economy of local governments? What are the new changes and trends in China’s economy behind the phenomenon of "consumption degradation" in first-and second-tier cities and "consumption upgrading" in third-and fourth-tier cities? In view of these problems, Luming Literature, an observer columnist and political and financial practitioner, described his own views.
New trends behind Spring Festival travel rush data.
Observer Network: The Spring Festival holiday in 2024 presents all the unpopular situations before. First of all, the number of people traveling in Spring Festival travel rush is expected to exceed 9 billion, of which 80% are self-driving and car rental, and the number of self-driving trips has reached a record high. What new changes do these data reflect in Chinese residents’ holiday mode, travel mode and automobile consumption market?
Luming LiteratureDuring the three years of the epidemic, travel was seriously blocked, and the willingness to go home and visit relatives and friends during the Spring Festival was not strong. Everyone basically chose to spend the New Year in their permanent place of work and life.
Before the epidemic in 2019, more people still chose to go home for the New Year, and most of them visited relatives and friends during the New Year. Some high-income families will also choose to travel abroad or in China, and this group will gradually increase before 2020.
Source: Interface News
With the increase of residents’ income and the change of ideas, especially the indifference of young people to traditional folk customs, more people regard the Spring Festival as a rare "ordinary long holiday" in a year, and the meaning of the festival is even weaker.
The surge in the proportion of self-driving and car rental trips this year largely reflects people’s yearning for "free flow" and makes up for the epidemic for three years.
In the choice of travel mode, more factors such as convenience and benefits are considered. With the price reduction and popularization of new energy vehicles and the vigorous development of the car rental market, the cost of car rental has dropped significantly compared with before; At the same time, services such as changing cars in different places and determining the loss of accidents have also kept pace, and renting a car is no longer a hassle.
Secondly, most people travel in family units during the Spring Festival. Considering the comprehensive cost, convenience and privacy, renting a car and driving by car are superior to traditional modes of travel such as high-speed rail and airplanes.
During the Spring Festival, the high-speed fee reduced by driving or renting a car is a great attraction. For example, driving from Xi ‘an to Chongqing is 700-800 kilometers one way, and the toll is almost 400 yuan, which is similar to the fuel cost, thus saving half the cost at once.
Cars are big consumer goods for families, and it is unlikely that they will decide to buy cars because of several long-distance travel plans. However, with the continuous improvement of the cruising range of new energy vehicles, the popularization of charging and replacing facilities and the improvement of safety, especially the decline in prices, it will stimulate greater demand for purchases.
At present, the car rental market has broad prospects, which will indirectly increase the demand for automobile consumption. At present, the operating data of several large car rental companies in China have increased significantly compared with before. In Ctrip, Feizhu, Shenzhou, Ehi and other companies, the proportion of trams is increasing. The proportion of trams purchased by car rental companies depends on consumers’ consumption preferences, which is essentially the same as the factors considered by self-purchase, such as safety, battery life and price.
During the Chinese New Year, the news of traffic jams in various places is also frequently searched, especially at the time of taking a vacation and receiving a vacation. The roads out of the city and into the city are congested, and the popular cities and scenic spots are congested. This kind of congestion caused by concentrated travel cannot be alleviated by building more roads and widening the original roads. The most essential reason is that the travel choice is relatively simple, and the first Spring Festival after the epidemic is superimposed, causing congestion.
With the increasing number of new energy vehicles, the coexistence of oil vehicles and trams will increase urban traffic congestion, which deserves the attention of relevant cities and road management departments and should be dealt with in advance.
Look at the positive momentum of China’s economy from film tourism.
Observer Network: According to the data of the Ministry of Culture and Tourism, there were 474 million domestic trips in the eight days of the Spring Festival holiday, and the total cost of domestic tourists was 632.6 billion yuan. In addition, the box office of the Spring Festival file once again set a new record, totaling more than 8 billion yuan, about 163 million person-times. The box office and the number of people watching movies recovered steadily, and the box office share of third-and fourth-tier cities rose to 52.6% again. Does the record-high movie and tourism data indicate a continuing positive economic development momentum?
Luming Literature:This year’s Spring Festival holiday "people follow the crowd" presents a thriving scene. It can be said that China’s Spring Festival economy or tourism economy has always been not bad. Looking back at the Golden Week in November 2023, the travel and consumption data are good.
It should be noted that these are not normal consumption, and residents need more holidays to spend and relax. The same is true for movies. The release time is very particular. When the same movie is released in the Spring Festival file and the day file, the eye-catching effect is different, especially at the box office. Of course, there are also factors such as publicity and film category, but in essence, we still choose a good consumption stall to grab traffic.
The record high data of movies and tourism shows that the economy is recovering to some extent, but we still need to observe whether this trend can continue. In addition to the above-mentioned characteristics of "compensatory consumption" or "retaliatory consumption", the per capita prices of tourism and movie consumption are declining, and movie fares are determined by publishers according to market demand and competitive environment. Excluding the promotion effect, the decline in fares reflects the real consumption level, indicating that the consumption level of Chinese residents is declining. Even if the film cuts prices for promotion, it also reflects the weakness of current consumption.
Observer Network: The popularity of tourism consumption is also reflected in the "Erbin fever". Harbin received more than 10 million tourists during the Spring Festival. Among the newly announced GDP targets of 31 provinces, the targets of 13 provinces are all higher than last year, and the target of Heilongjiang Province is from 2.6% last year to about 5.5% this year, which is behind the confidence brought by the cultural tourism economy to the local government. From Zibo to Harbin, how can other local governments tap the potential of cultural tourism, develop characteristic tourism into a sustainable project and raise the economic temperature of China?
Luming Literature:Zibo and Harbin are two different case representatives. Zibo belongs to "making something out of nothing", creating a hot spot. Zibo seized this wave of enthusiasm in a timely manner, and all departments worked together to add luster to the cultural tourism. However, this kind of sustainability remains to be seen, and Zibo wants to increase its popularity with the help of tourism fever, thus helping attract investment and industrial development. The former is realized, but the latter is not. The reason is very simple, the location advantage is not significant, and the supporting policies have not been followed up.
Harbin belongs to "Re-create Brilliance", maintaining traffic and reaching new heights. With the endowment of ice and snow resources, Harbin Ice and Snow World Tourism Project can attract many tourists every year. Why is it so hot this year? Harbin must have learned the essence of Zibo’s making good use of traffic, as well as the moves of local cultural tourism departments in making video "fancy propaganda".
Harbin achieved a total tourism revenue of 16.4 billion yuan during the Spring Festival. Source: The Paper
The most fundamental thing is that Harbin is rich in tourism resources, such as bathing, hot kang, Xue Cun, cotton-padded jacket with big flowers, duet, etc., all of which are fresh for tourists and are consumption points.
A few years ago, when real estate was in full swing, various places were engaged in "happy world", with different scales. The quality of the projects is uneven, some of them have hidden dangers of facility safety, some projects are remote, and the surrounding facilities are uneven, so it is impossible to form a consumer cluster, and the consumer groups are not clear, which leads to poor operation. Up to now, abandoned amusement facilities are everywhere.
For example, ancient towns and streets around the country lack characteristics, and investment projects are basically not differentiated. There are stinky tofu everywhere, hot pots everywhere, and more become ordinary commercial streets.
To tap the potential of cultural tourism, we must first understand the local characteristics, clarify the localization and characteristic positioning of cultural tourism, and conduct differentiated operations to attract traffic people. The second is to find ways to maintain traffic, which requires continuous investment in innovation, energy and time, not just funds. Studying local historical evolution, celebrity deeds, physical geography, local customs and customs, and continuing local culture with creativity are not only inheritance and protection, but also promotion and development.
Among these cases, the more successful case is that the protection of ancient dwellings combined with tourism development in Lishui, Zhejiang Province not only has the characteristics of national culture and life, but also attracts foreign tourists to stop. However, it should be noted that the contribution of cultural tourism to economic growth is limited, and it is difficult to continuously stimulate economic growth through cultural tourism unless it has rich tourism resources and is often innovative. For most areas, it can be used for reference.
As the introduction of economic development, the cultural tourism project can realize regional differentiated positioning, and the subsequent development will be driven by other industries. The relationship between them is worth exploring, and the cultural tourism can play a greater added value if it is well explored.
Observer Network: At the same time, there are some market chaos, such as "Fu Yuanhui was blackmailed for chartering a car in Changbai Mountain, Jilin Province". What lessons should local cultural tourism departments learn?
Luming Literature: The local government wants to maintain the traffic and passenger flow brought by tourism, at least not let it decay. This is easier said than done, and it requires wisdom, but also the courage and foresight of local leaders. Many times, the "boat" will douse the small flame of economic recovery.
Great efforts should be made to manage the business environment, but governance is not a blind coercion or a simple and rude ban, but a focus on how to form a "climate".
"Toilet Revolution" and "Cigarette Pick-up Action" are very effective in reversing bad habits and flaunting new ones. How to do it specifically needs to be adapted to local conditions. It still needs to be emphasized once again that "cultural tourism" is not a panacea. If we want to know what economic benefits the cultural tourism industry can bring to the region and how to use the popularity brought by cultural tourism to realize the development of related industries.
Observer Network: Since 2023, China has announced visa-free access to 20 countries, 12 of which are mutual visa-free. Under the background of tourism recovery and freedom of outbound travel, can China tourists create another pre-epidemic tourism shopping boom?
Luming LiteratureWhether the upsurge can be formed in the short term and sustained in the long term depends on the domestic economic development. Before the epidemic, everyone went abroad to travel and shop, which was more an upgrade and replacement of domestic travel and shopping.
Visa exemption brings convenience, and more outbound travel demand will be stimulated when the cost and experience are comparable. What’s more, prices in Southeast Asian countries such as Malaysia and Thailand are relatively cheap, and the experience of going abroad is fresher.
The 38th China Qinhuai Lantern Festival was recently lit in Nanjing. The picture shows a foreign tourist taking a photo in Nanjing Laomen East Scenic Area. Photo by Su Yang (People’s Vision)
Observer Network: For foreign tourists visiting China, some netizens observed that "there are fewer foreigners coming to China". This phenomenon has caused discussion. What are the possible reasons?
Luming Literature:According to the investment data, the amount of foreign direct investment (FDI) and the number of newly established enterprises have increased in recent years, indicating that the number of enterprises and funds coming to China has not decreased.
However, the growth rate of foreign direct investment in newly established enterprises has decreased compared with before, as well as the structural adjustment of FDI host countries. For example, the amount of direct investment in China by countries along the "Belt and Road" has increased significantly, while other countries have slightly increased or even decreased, which makes us have the illusion that there are fewer foreigners. Standing in Shanghai, this sentence may be right, but standing in other cities such as Xi’ an is not necessarily right.
From the data of China’s service import and export, both service export and import are increasing. In 2022, the service export was 2,852.2 billion yuan, an increase of 12.1%; Service imports reached 3,127.9 billion yuan, up by 13.5%. The service import and export deficit was 275.7 billion yuan. Among them, inbound and outbound tourism is included in the service import and export data.
The structural changes of foreign immigrants are directly related to international politics, bilateral and multilateral economic and trade cooperation, and are also influenced by visa policies of various countries. For example, during the epidemic, the United States, Britain, Japan and Australia restricted the entry of Chinese citizens. In recent years, substantial progress has been made in exchanges and cooperation between China and Central Asian countries. In Beijing and Xi ‘an, there has been a marked increase in personnel exchanges between Central Asian countries.
"consumption upgrading" of county economy
Observer Network: The share of third-and fourth-tier cities in the Spring Festival stalls has increased, but the per capita fare has dropped. Is the reason behind it "consumption degradation" or strong demand? Is the decline in per capita consumption affected by the general environment of consumption degradation in recent years, and how long will this wave of consumption degradation last?
Luming LiteratureThe pricing of movie tickets is a market behavior. The prices of different cinemas in the same city are different, and there are also differences in different cities. The decline in ticket prices in third-and fourth-tier cities should be attributed to the market-oriented behavior of film distributors and cinema enterprises to decide to lower prices through market research, and the "sinking" move is remarkable.
Perhaps it is the growing cultural and entertainment consumption demand of residents in third-and fourth-tier cities, and the consumption power of returnees in third-and fourth-tier cities during the Spring Festival. Under this background, the per capita fare of Spring Festival stalls is reduced.
Many problems have structural explanations. There are differences between third-and fourth-tier cities and first-and second-tier cities, counties and towns. From the course of formation, development and evolution of cities, third-and fourth-tier cities generally have a certain industrial base.
First-and second-tier cities stand out from the same group of cities with industrial strength, or because of the strategy of strengthening the province, or because of the innate location advantages of linhai and Linjiang, they have a strong siphon effect in commerce and service industry.
Counties and towns are based on agriculture. In recent years, with the industrial transfer and rural revitalization, they have a certain industrial base. Of course, industrial strength is also related to resource endowment.
In the pulling effect of tertiary industry on economic growth, industry is significantly greater than agriculture and service industry. Therefore, the economic growth rate of China has entered the middle-high speed stage from high speed, and the service industry is the most affected, while the fluctuation of agriculture is not significant due to price restrictions.
Although some industries are in a state of overcapacity in the industrial field, the income fluctuation of employees is far less than that of industrial and commercial employees in first-and second-tier cities. Moreover, the expenditure pressure is not an order of magnitude at all, so the net balance of residents in third-and fourth-tier cities fluctuates little, and their sense of acquisition and happiness is relatively high. Therefore, the film market chose to "sink" and aimed at the residents of third-and fourth-tier cities.
There is also linkage in consumption downgrade, but there will be a lag. As for how long the consumption downgrade will last, it’s hard to say. If industrial upgrading can’t meet a large number of employed people, and overcapacity can’t be smoothly channeled, it’s very difficult for residents’ income to remain at the current level.
Pessimistic expectations will lead to more extensive and universal conservatism, and consumption degradation will become the norm, making the market return to rational consumerism. This is not necessarily a bad thing. Rational consumption will also give birth to more sub-sectors and improve the quality of products and services.
Observer Network: There is an interesting and popular video during the Spring Festival. In the video, girls are working hard in Beijing. When they return to their hometown and county, they find that everyone lives in a villa, drives a BMW, buys one or two thousand clothes and buys lobsters from supermarkets in Sam. Many comments below the video have similar observations, which is completely opposite to the expected consumption downgrade in the market. Some people think that the wealth of the county town depends on endless urban investment. What are the possible reasons behind the "consumption upgrade" of the county town?
Luming Literature:There are many accidental factors behind this phenomenon. Different counties may have different resource endowments such as mining areas, developed fishery and animal husbandry, and suitable for planting cash crops.
Video screenshot
Living in villas and driving BMWs generally costs thousands of dollars, which does not exist in most counties. At most, local industries promote employment and increase residents’ income. At the same time, the cost of living is relatively low, and the net balance and accumulated family assets are more than those of young people who work hard in big cities. It is not ruled out that everyone will have a luxury during the Chinese New Year and change their simple consumption habits.
The purpose of urban investment and borrowing is mainly used for local infrastructure construction and improvement of industrial supporting facilities. Among them, there will also be local people who make a fortune by operating building materials trading, construction, decoration, personnel dispatch and other businesses related to city investment. If corruption is not involved, it is a business opportunity and a successful venture.
Personally, I think that the consumption phenomenon has little to do with urban investment bonds. After all, all counties in the country are engaged in urban investment and borrowing money, and not every county is "ordinary and rich".
Observer Network: What do you think of the economic changes and transformation in China reflected by the economy during the Spring Festival this year? What boost will these new consumption trends bring to China’s macro-economy?
Luming LiteratureThis Spring Festival has seen the longing and yearning of China people for a better life. With the deleveraging of real estate, the debt reduction of local governments, the end of international local wars in the foreseeable future, and the turmoil in the surrounding waters of China, everyone is happy to celebrate the New Year and forget the rush and fatigue of the year.
It is full of joy to spend the New Year at home or go out with the whole family. Whether China’s economy is "booming" or "declining" is not sung, but everyone can feel it realistically. It is because of their own personal experience that they can be calm and calm at the end of the year.
Short-term consumption can improve market enthusiasm and help restore market confidence, and enterprises will make corresponding investments such as capital increase and production increase, which will help boost the economy. But short-term economic stimulus is not enough. Therefore, it is suggested that the authorities should seize the opportunity, take advantage of this wave of consumer enthusiasm, introduce more economic stimulus measures, and form a long-term mechanism to get twice the result with half the effort. Using the "policy toolbox" requires skills, identifying opportunities and predicting market reactions, not just pure appeals.
For China’s economy in 2024, the economic focus should be on all aspects such as food, clothing, housing and transportation that ordinary people care about, with no trivial details. The impassioned "grand narrative" is not as good as the "well-fed" small wealth, and the bewitch of individual people with ulterior motives can’t keep up with the real touch and vivid experience of ordinary people.
Reporting/feedback