New Attempts to Boost Household Consumption: Spring and Autumn Breaks for Primary and Secondary Schools

The spring and autumn breaks for primary and secondary school students are a new attempt to create consumption scenarios and stimulate resident consumption.

Last week, primary and secondary school students in Sichuan, Guangdong, Zhejiang, and other regions had their first autumn break, combined with the weekend to form a 5-day mini-holiday. The first "report card" of the autumn break economy released by OTA platforms such as Ctrip, TONGCHENGTRAVEL, and Qunar shows that during the autumn break, the booking volume for scenic spot tickets, flights, and hotels in Sichuan all showed growth. The search popularity for travel products in multiple regions increased by over 50% year-on-year, with the overall booking volume for tickets in Sichuan province increasing 3.4 times compared to last year, and a 1.4 times increase compared to the five days before the autumn break. The volume of flights departing from Chengdu increased by 22% compared to a week earlier. This also suggests that the 14th Five-Year Plan aims to increase the resident consumption rate, and service consumption such as cultural tourism may be an important policy lever.

We believe that observing resident consumption demand should not be limited to retail sales data, as the service consumption share in retail sales data is only 10%. In contrast, over 40% of per capita consumption expenditure by residents in our country is allocated to service consumption, including rigid service consumption such as education, healthcare, elderly care, and childcare, as well as optional service consumption such as cultural tourism and sports, which are not reflected in retail sales data.

Since July 2023, the National Bureau of Statistics has begun to publish cumulative year-on-year data on service retail sales. In the first ten months of this year, cumulative year-on-year growth for goods retail was 4.4%, while cumulative year-on-year growth for service retail was 5.3%. The cumulative year-on-year growth rate for total goods and service consumption was 4.8%, which is 0.5 percentage points faster than the cumulative year-on-year growth for retail sales.

Stimulating the resident consumption rate through service consumption may not pose a risk of consumption overextension. Since last year, the subsidy policy for durable consumer goods has seen a significant decline in effectiveness due to the cooling of the real estate market. For durable consumer goods, the likelihood of annual replacement is low unless there is sustained improvement in real estate sales leading to new demand. However, for service consumption, even optional service consumption, the possibility of overextension is also low. Consumers are unlikely to stop playing sports or watching sporting events this year just because they participated in a few games or watched a few events last year.

The main issue with service consumption is the insufficient supply of consumption scenarios, which is something the government can work on. In recent years, some popular cities and concert economies have seen local governments actively marketing their offerings. Therefore, the spring and autumn breaks for primary and secondary school students are a new attempt to create consumption scenarios and stimulate resident consumption.

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