China's economy is on a patchy way to recovery

China has witnessed a rapid revival of consumer spending in service sectors since the Lunar New Year holidays started Jan. 21, bouncing back from a distressing period during an unprecedented pandemic wave in December and January.To get more china economy news today, you can visit shine news official website.

There has been a remarkable growth seen in spending, indicated by a flush seen in sectors such as dining, moviegoing, accommodation and tourism.

Enthusiastic tourists have flocked popular cities since late-January, booking up hotels and even pushing up local coffee prices.

Some popular restaurants amassed waiting lists exceeding 4,000 tables per day during the January holidays, and 1,000 to 2,000 tables on weekends in February, according to sources.

People are also lining up at popular temples to pray for their 2023 fortune. January-February ticket orders for temple-related scenic spots increased by 310% on the year, according to data from Chinese travel agency Ctrip.

Yet something has been amiss during this period of meteoric rise seen in spending.

At a time when air tickets and hotels in popular cities are rising, urban bus operations in Shangqiu, a city with close to 8 million residents in central China's Henan province, were nearly suspended in late-February due to inadequate fiscal subsidies.

While the number of people, mostly tourists, applying for outbound travel permits in Shanghai hit an all-time high in January, the number of empty containers waiting for export goods at the ports of Shanghai and Shenzhen hovered in near-record high as of end-February.

Fancy coffee shops in big cities are seen packed with people enjoying sunny afternoons, but people with poor expectations of future income and property prices have largely reduced their spending, leading to huge excess savings.

The increase in China's household deposits hit an all-time high of Yuan 17.9 trillion ($2.589 trillion) in 2022, much higher than the Yuan 9.9 trillion increase in 2021, according to the People's Bank of China. In January, this increased by Yuan 6.2 trillion from a year ago, also a record-high growth ever for the month.The sharp increase in savings last year was largely due to reduced investment spending by mid- and upper-income households amid the slowdown in property sector. But China's reopening from the pandemic lockdowns is unlikely to trigger a flow of the savings into the consumption sector.

The current "revenge spending on services," as well as the sales growth in passenger cars and some home appliances, might not be sustained.

The key to a sustainable consumer spending recovery in China is the increase in disposable income of low- and middle-income households. But these are the groups that will be mostly weighed down by the slowdown in property investments and shrinking overseas demand for Chinese manufactured goods this year.