Chen Jiahe, Chief Investment Officer from Novem Arcae Technologies spoke to CGTN Europe about China’s spring festival consumption.
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00:00This year's Spring Festival saw huge amounts spent in China, as people celebrated in record-breaking style.
00:07China's box office raked in a record $1.3 billion over the Lunar New Year.
00:13That's a rise of nearly 20% from the previous year.
00:17It was a home-grown success, with the top of the charts dominated by domestic productions.
00:23Nilchar II earned a record $523 million,
00:27followed by Detective Chinatown 1900 and the creation of the Gods II demon force.
00:34Tourism revenue from the eight-day holiday saw a jump of nearly $100 billion.
00:39That's a year-on-year increase of 7%.
00:42Cross-border trips in and out of China increased by 6.3% from the same period last year,
00:49with a significant increase in foreign tourists arriving,
00:52as Beijing eased restrictions on international travel.
00:56Chen Jiahe is Chief Investment Officer of Novan Archive Technologies.
01:02Well, when we look at this Spring Festival, we saw a very large increase in the consumption.
01:07I mean, if you look at many sub-sectors, for example, for the fuel market,
01:12the box office revenue in China has actually set the record.
01:16It broke its own record and reached over 10 billion RMB,
01:20which is the highest level ever in history.
01:23And if you go to the shopping malls, you can just feel the crowds.
01:26I mean, there are so many reasons behind this.
01:29I mean, first of all, China's consumption is growing.
01:32Also, it's a lot of foreigners coming into visiting China,
01:35which boosted China's consumption as well.
01:37I mean, if you have been knowing that China's government has set out
01:41a lot of visa-free policies for many citizens around the world.
01:45Just come over to China and enjoy a hard day for 30 days without applying for a visa at all.
01:51So this attracted a lot of foreign tourists, which boosted China's consumption.
01:56And also one of the reasons is that China's government has been putting a lot of
02:00stimulation plans to help the consumption.
02:04For example, we reduced the mortgage rate paid by people so that they bear less cost
02:09for their mortgage, which means they will get more money for consumption expenditures.
02:14So there's quite a lot of policies given out.
02:16So all these things really help the consumption during the spring festival.
02:20I mean, the interesting thing is that confidence among shoppers around the world
02:24seems to be in rather short supply.
02:27I mean, what do you think are the factors in driving this surge in consumer spending?
02:34Well, if you look at China, China is an economy that is still growing at about 5 percent per year.
02:40And that's amidst the negative thing of the housing market.
02:43I mean, China's housing market hasn't been good for like three or four years.
02:48And amidst this, China's economy is still growing at 5 percent,
02:51which tells you that beside the housing market, you get the growth rate among many sectors
02:56at about 6 or even 7 percent growth.
02:59And that helps the consumption, which is the reason why China's consumption is increasing.
03:04I mean, if you look at the income of the Chinese people,
03:06they are increasing at about 5 or 6 percent per year.
03:09The pension is increasing by about 5 percent every single year.
03:13Just sit there and the government gives you more money.
03:16So with all this increase in the GDP and the income,
03:19Chinese people just get more and more money to spend.
03:22I mean, after all, we are still a developing country.
03:24We're having a per capita GDP of about 13,000 USD.
03:28That's about one-fourth of the level of countries like Germany or France.
03:33So that means we've got a large room to develop, and that's why we've got a very high growth rate.
03:38I want to talk to you about travel because, I mean, clearly holidays all around the world
03:43are no longer viewed as luxuries.
03:45We view them working very, very hard as essential.
03:49You just look at these travel figures for China, 2.3 billion passenger trips made during this holiday.
03:55I mean, clearly, travel demand has rebounded considerably.
04:00Yes, I mean, that's a sign.
04:02I mean, this year, there are many people traveling.
04:05One of the reasons that so many people are traveling is that Chinese people got the tradition
04:09to go back to their hometown during the spring festival, which is a pretty long holiday.
04:13I mean, this year, the holiday is particularly long, about eight days.
04:17And I actually know that many people just put three more working days there,
04:22and you can get an extra weekend, which means about 13 days holiday.
04:25So it's a lot of people are just going back to their hometown, which is a tradition.
04:29And this increased a lot of traveling.
04:31And the second thing is that many Chinese people nowadays are using this kind of long holiday
04:36to have a trip to other countries.
04:39Like one of my friends is speaking to me from Egypt today, and she took, like,
04:44seven or eight days trip to there.
04:46So there's quite a lot of Chinese people going out, and many people come into China as well.
04:50So all these things just boosted the traveling in China.