China pins hopes on extended Lunar New Year holiday to boost slowing economy

Chinese officials expect this year’s unusually long Lunar New Year holiday to provide a much-needed boost to the economy, identifying increased domestic spending as a top priority.

The government projects a record 9.5 billion trips will be made nationwide during the 40-day travel rush, up from 9 billion last year. The official holiday will span nine days, one day longer than the traditional break.

To encourage consumer activity, the central government announced it will issue more than 360 million yuan ($52 million) in shopping vouchers throughout February.

The stimulus effort comes as the Chinese economy faces headwinds from high household savings rates, with families currently tucking away about one-third of their income. Last year, national retail sales grew by only 3.7%, trailing the country’s 5% GDP growth.

Boosting domestic demand remains a pillar of China’s next five-year plan. Officials have identified the service sector, including entertainment and elderly care, as a primary area for potential growth.

Beijing’s decision to prolong the Lunar New Year holiday and distribute consumption vouchers signals a calculated intervention rather than mere festive celebration. It underscores an urgent effort to address a chronic structural malaise: China’s over-reliance on exports and persistently weak domestic demand. With Chinese households still funneling nearly one-third of their income into savings, a nine-day holiday is unlikely to dismantle deeply ingrained frugal habits.

This policy shift carries significant implications for regional trade partners, particularly Vietnam. A successful pivot toward a consumer-driven Chinese economy would bolster demand for Vietnamese exports, ranging from agricultural commodities to electronic components. Conversely, should these domestic measures falter, Beijing will likely double down on export-led growth to compensate for internal weakness, forcing Vietnamese manufacturers into fiercer competition across global markets. Furthermore, any volatility in Chinese spending priorities will inevitably recalibrate the flow of outbound tourism into Southeast Asia.

The recent backlash and subsequent cancellation of "surrogate visiting" services—where commercial entities were paid to fulfill traditional family obligations—highlights a growing friction between state-led modernization and cultural values. It exposes the inherent limits of attempting to commercialize social rituals for the sake of economic activity.

Ultimately, the true barometer of success for these measures will not be found in temporary holiday retail surges. Instead, the focus remains on whether Beijing can leverage this momentum to enact a sustainable, structural economic transformation that reduces its dependence on the global consumer.

The article highlights how the Chinese government has repurposed the Lunar New Year as a macroeconomic policy tool, a move that starkly contrasts with the values held by the Vietnamese diaspora. In the United States, particularly within hubs like Little Saigon, Tết is defined by family legacy and community solidarity rather than state-driven targets. For many in the community—whether they are entrepreneurs in the nail salon industry, professionals on H-1B visas, or families navigating F2B or EB-5 petitions—the season is marked by cultural tradition, gatherings at phở restaurants, and the sending of remittances. Ultimately, for the diaspora, the holiday remains a vital cultural anchor centered on heritage rather than geopolitical strategy.