China's economy is on the right track to recovery in 2021. We expect the Chinese consumer to play a bigger role this year, thanks to pent‑up demand. Successive holidays and festivals have been accompanied by improving consumer confidence. Residential property, one of the first sectors to recover, remains well supported. Sectors exposed to developed markets economic recoveries might also benefit, as well as export manufacturers leveraged to global trade.
We believe the COVID‑19 vaccination rollout should facilitate a further rebound in those business and consumer services that have been lagging, such as food, hotels, entertainment, and personal services. Though the country's international borders remain shut, domestic air travel and tourism have rebounded strongly. During the Labor Day holidays in early May, the number of domestic tourist trips reached a record 230 million, 3.0% more than in 2019.1 As China ramps up its vaccination program, we should see a more visible path for opening international borders in 2022.
1 Source: Chinese Ministry of Culture and Tourism.
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