Ahead of China’s Golden Week, when families take trips to reunite, boosting spending and tourism, and the Mid-Autumn Festival falling on 1 October as a national holiday, is grist for how Chinese consumption during this period may speed economic recovery.

China's "Golden Week" holiday from 1 to 7 October shines a light on the sort of consumer spending patterns that exist in the Asian giant. At a time when the country is recovering from the pandemic, and locked in a protectionist trade dispute with the US, we share these thoughts from international investment house Invesco. 

Mike Shiao, chief investment office for Asia at Invesco looks at how the week of celebrations could be a harbinger of Chinese consumption's role in driving a post-COVID economic recovery. Indicators on his watch-list include:

China consumption activities resumed
-- Advance online travel booking for Golden Week two weeks before the holiday season in China reiterated our investment thesis of China’s strong V-shape rebound of consumer retail activities; 
-- According to a leading Chinese online travel agency, air ticket booking volume has exceeded 90 per cent of the same period last year; and
-- Hotel bookings also saw rising demand, as overall average daily rate per room nights (ADR) grew by 20 to 30 per cent year-on-year. (For example, an online travel platform indicated ADR increases by 65 per cent compared with August this year).

Consumers are trading up, demanding better quality and experience
Shiao said this point covers higher-quality accommodation, private transportation, and more customised travel experience after COVID-19.
-- More than 80 per cent of orders on a leading online travel agent in China go to high-end products (4-star and 5-star) for better service and experience. Private and small group tour mix rises to two-thirds of total group tours; and 
-- Search engines in China shows that self-driving is the most popular domestic travel activity, which has pushed up car rentals; and 
-- Companies innovate to provide elevated customer experience to capture the rising consumer demand.

Asian economies are on the path of recovery at different paces
While China is leading the recovery, other economies in Asia are on the path of recovery at different paces, Shiao notes.
-- In Taiwan, consumer confidence improved for the third consecutive month, coming in at 71.3 in August, vs. 69.4 in July. Meanwhile, retail sales picked up to +3.3 per cent year-on-year in July versus +0.1 per cent year-on-year in June;
-- In Korea, we see encouraging signs of domestic travel bottoming out from recent lows; and
-- In India, Google mobility indicators show the recovery path after different phases of country lockdown, as seen in a pickup in retail and recreation as well as groceries and pharmacy.