China's May Day Holiday Spending Rises 8%, But Services Sector Slows Amid Trade War

May Day Holiday Spending

• 💰 Chinese travelers' spending during the May Day holiday increased by 8% year-on-year, reaching $24.92 billion.
• 📈 Despite the rise, spending was still off pre-pandemic levels, indicating a cautious consumer.
• 🚗 The number of domestic trips recorded was 314 million, a 6.5% increase.
• 🍽️ Spending on restaurants saw a notable increase.

Services Sector Slowdown

• 📉 China's services activity expanded at the slowest pace in seven months in April.
• ⚠️ New order growth in the services sector slackened from March, partly weighed down by tariff uncertainty.
• 📊 The services sector contributed 56.7% to China's total GDP last year, with 48% of employees working in this industry in 2023.

Economic Challenges

• 📉 Consumption in China has suffered due to sputtering economic growth and a prolonged property crisis.
• ⚖️ The US-China trade war is expected to deepen economic pain, potentially hitting the manufacturing sector and impacting business hiring and consumer confidence.
• ⚠️ Persistent deflationary risks continue to challenge China's economy, despite stronger first-quarter growth supported by government stimulus.