China’s National Day on Wednesday kicked off a week-long holiday that policymakers in Beijing hope will see consumers splurge on travel, entertainment and hospitality.
The commerce ministry has told popular cultural and tourist sites to extend opening hours and simplify reservation systems in advance of the holiday to encourage the spending spree China needed to boost domestic demand.
Official figures this week showed manufacturing activity improving slightly in September but remaining in negative territory for the sixth month in a row.
Construction and services activity fell last month to the 50 mark in the official purchasing managers index (PMI), right on the dividing line between contraction and expansion.
Trade uncertainty is weighing on exporters, although the tariffs of 145 per cent and 125 per cent the US and China respectively imposed on each other’s goods have dropped sharply while talks between the two sides continue.
Tariffs at that level make trade almost impossible, but the current 55 per cent US tariff on Chinese goods is steep and likely to remain in place until a deal is reached – and Washington appears to be content with that.
“If you ask the [US] president, ‘Do we have a deal with China?’ He would say, ‘Yeah, this is our deal. I’ve got 55 per cent tariffs on it. That’s the deal’. So that is a good status quo,” US trade representative Jamieson Greer said this week.
[ China manufacturing sector contracts once againOpens in new window ]
Despite the headwinds faced by China’s economy, including a property market slump that shows no sign of ending after four years, the stock market is booming. The Shanghai Composite, an index of mainland Chinese shares, hit a 10-year high last month while Hong Kong’s Hang Seng is up 30 per cent in 2025.
Investors appear to be putting their faith in a shift in Beijing’s official policy that sees a focus on boosting economic growth rather than avoiding risk.
This week’s holiday may offer some evidence as to how effectively the official message is percolating downwards to China’s consumers.