The May 1 holiday, one of the top vacation/work break moments in China’s annual cycle, was a blowout for the tourism and travel industries, as expected. Total number of travelers was even higher than pre-pandemic 2019—a 3.2% increase—even though total revenues from all that traveling and holiday activity were down on 2019 levels. So that means … Chinese people were anxious to take a break but are still cautious about too much discretionary spending.
One of the miracles of modern China is the express courier services which bring almost anything you want to your doorstep or desktop in almost no time at all. But the intense competition and razor-thin operating P/L margins resulted in four smaller listed courier firms reporting losses for the first quarter of this year.
China has an extremely high debt-to-GDP ratio, which in a normal system would have resulted in massive problems long ago. But in the highly controlled and centralized system that is China, gravity is not such an issue, and there is the ability, given the total control, to gradually ameliorate situations as the can is kicked down the road. Which is to say that China’s ratio at the end of March stood at 276.8%, 2.6 percentage points lower than at the end of December, the central bank reported. The US debt-to-GDP ratio, for comparison, is around 100%.
And in international news, the wolf warriors are running. Australia said it was reconsidering a deal under which a Chinese company took out a 99-year lease on the port of Darwin in the north of the country in 2015, and Beijing immediately canceled its ministerial-level economic dialogue “indefinitely”. How does this one end, one wonders?
Enjoy the sunshine!