China's tourism revenues during the Lunar New Year holidays surged by 47.3% year-on-year, surpassing pre-pandemic levels and offering temporary relief to policymakers amid deflationary risks. Domestic tourism spending reached 632.7 billion yuan, with the number of domestic trips growing by 34.3% from last year. However, average spending per trip decreased by 9.5% from 2019, indicating consumption downgrading. International travel also saw a significant increase, with the total entry-exit trips returning to 90% of 2019 levels. The economy, facing challenges such as a property downturn and sluggish demand, prompted policymakers to maintain a delicate balance between supporting growth and addressing deflationary pressures.
House Republicans have released a short-term bill to avert a government shutdown until October 31, pairing it with a conservative border security measure. The bill includes cuts to domestic spending, but is expected to face opposition in the Democratic-led Senate. It also does not address priorities such as Ukraine aid or disaster relief. The legislation has been criticized by Democrats for its extreme measures and failure to work on bipartisan solutions. It remains uncertain whether the bill will garner enough votes to pass the House.
Chinese export growth slowed in April due to a cooling global trade, highlighting the importance of domestic spending as the main engine for the world's second-largest economy. The figures add to signs of softness in global trade as spending slows in the US and Europe, with many economists expecting recessions in advanced economies later this year. Consumers and businesses are confronting steepening interest rates, persistent inflation, and pockets of instability in the banking sector.
