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Economy

China's Golden Week spending slows as consumers tighten purses

Holiday travel turns inbound as weaker yuan hampers international trips

Tourists walk through Shanghai Pudong International Airport on Friday. (Photo by Ken Kobayashi)

SHANGHAI -- Patriotic purchases boosted spending during a weeklong national holiday that ended Monday, celebrating the 70th anniversary of the founding of the People's Republic of China, but the growth rate in retail slowed from a year earlier.

Sales at retail outlets expanded 8.5% to 1.52 trillion yuan ($213 billion), smaller than the 9.5% growth in 2018, according to data released Monday by the Ministry of Commerce. This was the ninth consecutive year in which the growth rate shrunk since the ministry began releasing data in the current format in 2010.

"The consumer market was wrapped in a festive mood with increased spending in shopping, food catering and tourism," the ministry said in a statement.

Spending during the annual holiday in October -- the other weeklong break is during the Chinese New Year in January or February -- has been growing for the past two decades. Officials watch the data closely as a guide to economic growth.

The data brings some temporary relief to authorities as growth in the world's second-largest economy slows. While gross domestic product expanded 6.6% in 2018, a report last month by the World Bank and a government think tank projected this will decline to 4% in the 2020s and 1.7% in the 2030s if only limited reforms were undertaken.

Fueled by travel by some 542 million people, tourist spending reached a record high of 45.26 billion yuan in the first four days of the holiday, 8.58% higher than in the same period last year, Ministry of Culture and Tourism data showed.

Chinese tourists in downtown of Shanghai on Friday. (Photo by Ken Kobayashi)

Alibaba Holdings attributed the growth to new spending patterns influenced by the anniversary celebration. The e-retailer said on Sunday that its online shopping platforms saw a 510% increase in purchases of facial masks to repair sunburn, while sales of Moutai branded Chinese wine jumped 12-fold.

Box office sales more than doubled to 4.2 billion yuan, according to the Yien mobile app, partly due to the "My People, My Country" film released in conjunction with the national day. Directed by seven people including Chen Kaige of "Farewell My Concubine" fame, the movie featured seven short stories that depicted historical events, including Hong Kong's return to China rule in 1997.

The film, which was also released in the U.S., topped the Chinese box office over the past eight days, taking in more than 2 billion yuan.

The slide in the yuan meant that travel tended to be domestic rather than international, with many people choosing Sichuan, Yunnan and Xian -- lower tier cities popularized by online influencers. Destinations in Southeast Asia were popular for people heading overseas, according to Alibaba data.

Tourists to Hong Kong, meanwhile, dropped visibly. Visitors to Hong Kong during the Golden Week holiday dropped 25% to 737,000 people a day, according to Hong Kong authorities. This is the first time in nine years for the daily visitor figure to dip below 800,000 during the period and is widely seen as due to the slowdown of visitors from the mainland.

This year's Golden Week also coincided with the Double Ninth Festival, which included Seniors' Day on Monday. Alibaba data showed an increase in searches by middle aged people for winter coats.

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