China saw a continued rebound in tourism over the Labour Day holiday, with visitor levels returning to pre-pandemic levels, while spending per head showed signs of stagnation as travellers increasingly opted for less-traditional destinations. Improved tourism numbers, combined with recovering retail sales, a nationwide trade-in programme for consumer goods, and a lingering housing crisis, are sending mixed signals for the state of the world’s second-largest economy, which is relying more than ever on the domestic market amid a trade war with the United States. During the five-day holiday, from Thursday to Monday, China recorded 314 million domestic trips nationwide, up 6.4 per cent, year on year, and surpassed the 195 million trips made during the same period in 2019, before the pandemic, according to data from the Ministry of Culture and Tourism. Total spending increased by 8 per cent, year on year, to nearly 180.3 billion yuan (US$25 billion), with per capita spending at around 574 yuan (US$80), slightly higher than last year’s 565.7 yuan. But the per-head tourism revenue over the holiday remained 10 per cent less than the pre-pandemic level, Goldman Sachs said in a note on Tuesday. It also said that the price sub-indices of April services PMIs remained low, pointing to persistent deflationary pressure and continued consumption downgrading. “We expect continued policy-easing efforts to stabilise growth, inflation and the labour markets, given the higher US tariffs, prolonged property downturn, and still-subdued private sector sentiment,” the US investment bank said. Meanwhile, smaller cities and rural areas lured visitors away from more bustling destinations over the holiday by offering distinctive experiences, according to online travel service Trip.com. Demand for rural tours surged more than 40 per cent, year on year, while bookings for county-level destinations rose nearly 20 per cent on the first day of the holiday period, it said. And buoyed by China’s unilateral visa-free policy, inbound travel bookings increased by 141 per cent year on year, the site added. China’s more relaxed visa policy, along with improved tax-refund measures, has encouraged inbound tourists to shop, with bookings to popular destinations such as Shanghai, Shenzhen and small-commodities hub Yiwu surging 138 per cent, 188 per cent and 60 per cent, respectively. Visitors from Myanmar, South Korea, Malaysia, Australia, Britain, Thailand, the Philippines, Russia, Vietnam and Japan accounted for most of the inbound travellers, according to the Ministry of Culture and Tourism. And the most popular destinations for Chinese heading overseas were Japan, South Korea, Singapore, Vietnam, Malaysia, Thailand, Indonesia, Australia, Cambodia and Russia, the ministry said. Meanwhile, boosted by China’s trade-in programme for consumer products, the holiday saw strong growth in the purchases of cars, home appliances and electronics. In the first four days of the five-day holiday, there were more than 60,000 applications for car trade-in subsidies, and the value of new car sales reached 8.8 billion yuan, according to the Ministry of Commerce. Retail sales of home appliances, automobiles and communication equipment saw year-on-year increases of 15.5 per cent, 13.7 per cent and 10.5 per cent, respectively, the official data showed. Zheshang Securities said China’s car trade-in subsidy policy was gaining traction, pointing to a rise in self-driving trips during the five-day holiday. Car rentals were also up 45 per cent, year on year. Meanwhile, local governments’ subsidies for property purchases have had a positive effect, with transaction volumes in 30 major cities outperforming those seen during last year’s holiday period, according to a note from China Merchants Securities, which did not provide specific data. Homebuying sentiment has clearly improved in first-tier cities, while buyers in smaller and lower-tier markets remain largely cautious, it added.