Policy effects evidenced in holiday economy

The five-day May Day holiday that ended on Tuesday has underscored the internal dynamics driving the world's second-largest economy. The surge in consumption demonstrated the effectiveness of policy support and the evolving preferences of consumers.

Both services and goods consumption registered growth during the vacation, with a record of more than 1.51 billion interregional trips, up 3.49 percent year-on-year. Sales in consumer-related sectors surged by 14.3 percent year-on-year, while UnionPay and third-party payment institutions such as Alipay and WeChat Pay processed 28.94 billion transactions, a 23.45 percent increase year-on-year.

Foot traffic and business revenue in major pedestrian streets and commercial districts rose by 5 percent and 5.3 percent year-on-year, respectively. Service consumption experienced explosive growth during the holiday — driven by a shift toward experience-oriented consumption, through the whole-chain linkage of food, accommodation, transportation, travel, shopping, and entertainment. Service consumption has become an important force in stimulating the vitality of domestic demand, with health and leisure services registering more than a 50 percent increase year-on-year from preholiday levels.

The government has implemented targeted policies to unlock the full potential of the holiday economy. Optimized vacation arrangements and trade-in incentives have been instrumental in encouraging citizens to spend and have played a crucial role in unleashing consumption vitality.

The holiday indicates China's transition from being the "world's factory" to becoming the "world's market". China used to seek to integrate into the global economy through manufacturing and exports. Now, it is becoming a major destination for foreign consumption.

The number of overseas visitors entering China during the holiday hit 1.26 million, up 12.5 percent year-on-year. Among them, 436,000 visitors entered visa-free, a 14.7 percent increase year-on-year. Payment data corroborates this trend: transactions by foreign visitors in China grew by 45.15 percent in number and 36.96 percent in value year-on-year, with Alipay reporting a nearly 70 percent increase in spending by inbound tourists.

This is a two-way consumption surge. On the one hand, with expanding visa-free access and convenient payment options, "China Travel" is becoming a tangible growth driver. Foreign tourists are diving deeper into local life, exploring night markets, practicing traditional exercises such as Baduanjin, and integrating into China's digital landscape. On the other hand, Chinese travelers are shifting toward interest-driven, immersive experiences abroad, with bookings on China's leading travel platform Trip.com for diving, skiing and museum tours rising by 78 percent from a year earlier.

All this exemplifies China's high-standard opening-up, not least because the surge in cross-border consumption is a direct result of the opening-up policies launched in recent years to attract foreign visitors.

The rise in cross-border trips is also built on the robust domestic market and comprehensive transportation infrastructure. The rise in inbound tourism signifies that China can export not only goods, but also the appeal of cultural experiences, lifestyle and consumption scenarios. According to the World Travel and Tourism Council, China is on track to overtake the United States as the world's top tourism market within the next few years.

However, there is still much work to do in further optimizing service supply, improving market regulation, and enhancing consumer experiences.

Still the holiday paints a promising picture of China's consumer market, which remains resilient and full of potential and vitality. With sustained policy support and innovative strategies, China is well-positioned to harness the full potential of domestic demand and foreign visitor consumption as the advantages of its increasingly open economy continue to emerge.