COVID-19 Dampening China’s Golden Week Celebrations

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BEIJING, CHINA - SEPT. 29: A Chinese woman stands outside a shop on a street lined with national flags in advance of the country's national holidays, also known as Golden Week, on September 29, 2020 in Beijing, China. China will celebrate its national day, marking the 71st anniversary of the founding of the People's Republic of China, on October 1st. (Image: Kevin Frayer/Getty Images)

Oct. 1 is celebrated as the National Day in China, commemorating the establishment of the People’s Republic of China. The seven-day period starting from Oct. 1 is considered a public holiday, also known as the “Golden Week” in China during which time concerts and festivities are held nationwide. This is usually a time of increased spending and travel. But this year, the COVID-19 pandemic is expected to dampen the vigor of the Golden Week.

What makes things worse for the Golden Week economy is that the Chinese regime follows a zero-tolerance policy in regard to any outbreak, meaning that officials will prioritize containing the pandemic even if such a move inflicts damage to the economy. 

The outbreak in Fujian has forced authorities to put some regions under lockdown and cancel flights. Local governments have asked people to avoid all unnecessary travel. In the city of Harbin, spas, mahjong salons, and cinemas were recently shut down to prevent COVID-19 from spreading.

“The zero-tolerance policy has been highly effective in putting COVID under control, but the short-term cost is also extremely high… At this stage, it seems that policymakers will stick to the zero-tolerance strategy at least before the [Winter] Olympics next February,” Larry Hu, an economist with Macquarie Capital, told the South China Morning Post (SCMP).

In Macau, a region famous for its tourism and casino sector, the October Golden Week tends to be one of the busiest periods of the year. However, recent infections discovered in two security guards at a quarantine hospital have triggered restrictions on travel in the region. 

Virus tests and quarantine measures have been strengthened. According to Credit Suisse analysts Kenneth Fong, Lok Kan Chan and Sardonna Fong, around 40 to 50 percent of people planning to visit Macau during the Golden Week have canceled their trips.

In a report, JP Morgan’s DS Kim, Amanda Cheng, and Livy Lyu pointed out that the timing of travel restrictions “could hardly be worse” as the industry was preparing to meet a “solid pent-up demand” during the Golden Week.

“While there’s still a possibility that travel restrictions could be lifted before or during Golden Week, we think it’s a foregone conclusion that it will be an un-golden holiday as many players are likely to cancel the trips to avoid risks of being quarantined upon their return to [the] mainland,” the report stated.

Tour operators are said to be preparing for trip cancellations and low travel numbers. Outbreaks during the summer vacations had already dealt a massive blow to the country’s travel sector.

In an interview with The Straits Times, a business owner of a boutique travel firm in Beijing said that he has noticed that people were going on “shorter trips.” He thinks that customers are worried about the situation changing during their trip, leaving them stranded. Last month, videos showed day travelers stranded outside of Beijing after authorities shut down city borders following outbreaks in neighboring regions.

Many employees at state-owned companies have not left their city of employment due to travel restrictions. “Given that our company’s policies closely follow national policies, as long as there are cases within the country, our bosses will be extra careful about where we can go… But emotionally, this makes us very tired. It’s probably time for the country to relook at opening up because when you see people in other countries, they coexist with the virus and it seems fine,” an employee from a state-owned enterprise said to the media outlet.

Recent economic data also points to the possibility of a dampened National Week performance. Last month, retail sales growth fell to 1.5 percent from 3.6 a month earlier. Retail sales growth is a key measure of consumer spending. 

Combined with COVID-19 outbreaks, worries about income are expected to limit customer spending during the Golden Week. Li Hui, a mother from Shanghai, plans to celebrate National Day in the mountains of Zhejiang while keeping a tight control on expenses.

“Too many things have happened this year, and I’ll spend the holiday resting and thinking. Hopefully, I’ll figure out what to do next… We’ll have a moderate holiday. A spending spree is definitely out of the question,” Li told the SCMP.

  • Jonathan loves talking politics, economics and philosophy. He carries unique perspectives on everything making him a rather odd mix of liberal-conservative with a streak of independent Austrian thought.