Regional governments are capitalising on the experience boom by sponsoring new cultural activities to attract tourists. BEIJING – Watching orders dwindle as China’s housing market slumped, factory owner Zheng Weirong decided to take action and protect his steel business from the real estate downturn. Betting on a tourism revival, he wound down a production line making metal bars in 2021 and shifted investment to producing container-sized cabins, often used as guest houses.
The pivot paid off, with demand exploding in 2023 after Chinese travel rebounded following the lifting of Covid-19 pandemic restrictions. With 50 full-time employees, he’s aiming to increase revenue by 30 per cent in 2024 to around 130 million yuan (S$23.99 million) – an ambitious target amid a slowing economy and faltering consumer spending.
“More and more people are pursuing travel or high-quality and beautiful things,” said the 38-year-old in the southern manufacturing hub of Guangdong. China’s consumption will gradually improve, he added. Mr Zheng’s success highlights a shift in Chinese consumption patterns, with people spending more on services even as they remain thrifty and refrain from splurging on goods.
This has made services a bright spot in otherwise sluggish consumption, which has weighed on LVMH Moët Hennessy Louis Vuitton SE and prompted Apple Inc to cut prices. The data support this. Retail sales of services grew 7.
5 per cent in the first half of 2024 compared with the same.