Shanghai and other parts of China either remained blocked on long vacation weekends in early April or were subject to travel restrictions, and official tourism revenue counts plummeted to just over one-third before the pandemic.
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Beijing — As mainland China tackles the worst Covid-19 outbreak in two years, consumer spending readings have fallen to levels not seen since the first pandemic shock.
Travel restrictions and blockades of districts or cities discouraged people from traveling on officially run holidays from Sunday to Tuesday.
According to the Ministry of Culture and Tourism, tourism spending by adventurous people recovered by just over one-third of the levels seen during the 2019 vacation, or 39.2%.
This is a much slower pace than during the Lunar New Year holidays at the beginning of the year. Tourism spending was 56.3% in 2019.
Over a three-week period, the number of symptomatic Covid cases in mainland China exceeded 1,000 per day, affecting regions across the country. The number of asymptomatic cases is much higher.
Shanghai, the country’s largest city, is one of the hardest hit cities in the Chinese wave of highly contagious variants of Omicron. The big city was supposed to end the two-part blockade on Tuesday, but earlier this week there were no signs of when the restrictions would be lifted.
Nomura’s chief economist in China, Tin Lu, said in a report on Tuesday that a total of about 193 million people live in a completely or partially blocked area in an area that accounts for about 22% of China’s GDP. Estimated to be.
“The market can underestimate economic damage,” he said. “Chinese [zero-Covid strategy] It may save many lives, especially among the elderly, but it also bears considerable financial costs and causes collateral damage to those who cannot receive the usual treatment for illnesses other than Covid. “
“Unlike the spring of 2020, it was generally believed that Covid-19 would end in the summer, but now there is no end. This increases uncertainty and is very negative for investment,” Lou said. Said.
The number of cases and deaths from Covid in mainland China is lower than that in other major countries. Large factories in the country can maintain production by having staff on-site, and economists expect the service industry to continue to be the most affected.
Shanghai Disney The resort has been closed for more than two weeks, and the theme parks and hotels will remain closed on Wednesday until further notice.
According to the ministry, tourism revenue for long-term vacations on recent weekends fell 30.9% year-on-year to 18.78 billion yuan ($ 2.93 billion). According to the data, tourism travel decreased by 26.2% from the same period last year to 75.4 million, 68% of the pre-pandemic level.
According to the booking site Trip.com, those who were able to travel during the vacation booked trips primarily to nearby or rural scenic spots.
In countries where online shopping is widespread, Covid also pays for parcel delivery.
According to the State Post Bureau, the number of packages received and delivered during vacation has each decreased by about 13% from a year ago. It was not immediately clear whether logistics stagnation or consumer demand was the main reason for the decline.
The Caixin Service’s Purchasing Managers’ Index (PMI) is a market indicator and showed on Wednesday: Business activity in this sector contracted most sharply in March in two years.
“Companies frequently mentioned that increased virus containment measures disrupted operations in March and squeezed customer demand,” Caixin said in a release. For the third straight month, data show that service companies are reluctant to hire more staff.
The services business was generally optimistic about growth over the next 12 months. However, the optimistic view, according to the announcement, was that since late 2020, “there is growing concern about the length of business operations affected by the pandemic and the Ukrainian war.”