China’s lunar new year travel set to hit ‘historic’ levels

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China’s annual lunar new year travel rush is expected to reach “historic” levels this year, as policymakers hope the country’s festive season will help lift the world’s second-largest economy out of deflation.

Chinese travellers have made more than 230mn “cross-regional” trips as of Tuesday, the most recent figures available, for the new year break, the ministry of transport said on Friday. This was up 5.8 per cent compared with the same period in 2023 and up 1.1 per cent compared with 2019, before the pandemic.

Authorities are predicting that during the entire 40-day span of what state media call the “Spring Festival holiday travel rush”, which runs from January 26 to March 5, Chinese residents will make 9bn trips, 80 per cent of them using private vehicles.

“This year’s spring festival travel rush is set to make history,” Li Yang, deputy minister of transport said in a preview of the festival travel arrangements in January.

This lunar new year, which begins on Saturday, is the first since 2019 to not be affected by the coronavirus pandemic, making it an important barometer of consumer sentiment. China has struggled to engineer a strong economic recovery in the wake of the pandemic, with gross domestic product expanding 5.2 per cent last year.

China’s official statistics agency this week reported a steeper year-on-year contraction than expected in the consumer price index for January — the fifth month that prices were either flat or falling — raising concerns that a deflationary cycle is becoming entrenched.

Alicia García-Herrero, chief Asia-Pacific economist at Natixis, said while the number of trips might pick up, consumers were unlikely to spend as in previous years given the weak economy, a property sector slowdown and low confidence.

“You have some pent-up demand for travel in there so that might be good, but I…