The May holiday came and went, and as expected Chinese people took the opportunity post-COVID to get out and enjoy themselves. The numbers were huge and largely in line with 2019, the last year before the virus hit. And while spending was solid, the total spend by Chinese consumers was only marginally above the 2019 level and when we also take into account the fact that the holiday this year was one day longer than in 2019, it is not a categorical sign of the Chinese consumer roaring back to life. There is clearly a sense of relief amongst Chinese consumers, but also a sense of caution about prospects for the future. People traveled, but they were careful not to splurge. And that caution is likely to persist for some considerable time to come.
The other trend worth watching is data access. The WIND system has been for many years the database that business people and investors use to get basic information on Chinese companies, listed and unlisted. But access to the WIND system has now been curtailed, which inevitably is going to make it harder for people to do business, and for foreign investors to justify investments. This on the surface makes little sense, given the fragile state of the Chinese economy, but it is all related to the basic goal of the Center, which is control at any cost. This obviously relates also to the visits that have been made to various auditing and consulting companies in the recent past, again emphasizing that data has to stay in-country, regardless of the consequences in terms of investor perception. The amount of data issued by the System through the National Bureau of Statistics and other channels rose dramatically after China acceded to WTO in 2001, but has dramatically declined in the years since 2010 as the Center increasingly takes the view that China’s system is safer in the absence of public numbers. It’s puzzling, but that’s the way they are thinking, and we watch as the de-coupling of data becomes ever more pronounced.
On the other hand, enjoy the weather. And have a great weekend.