How China’s Big Annual Migration Differs This Year

Lunar New Year, China’s most important holiday, is an annual ritual of family reunion that usually involves billions of trips home and back. In early 2020, the emerging coronavirus pandemic complicated travel, stranding millions away from their jobs for weeks. This year, with new restrictions in place to control recent Covid-19 outbreaks, mainly in northern China, many people won’t be able or willing to leave town in the first place. That threatens to drag on the nascent recovery in Chinese consumer confidence and spending.

1. What’s Lunar New Year?

Also known as Chinese New Year or the Spring Festival, it marks the beginning of the Chinese lunar calendar, and is seen as celebrating values like unity and family ties. People in China get a statutory seven days off beginning New Year’s Eve, which falls on Feb. 11 this year. Traditionally, the celebrations span 16 days, from a family feast on New Year’s Eve through the Lantern Festival on Day 15. Many migrant workers seize what’s often their only chance in the year to return home.

2. Are people curtailing travel plans this year?

Yes. Due to the restrictions, China expects its citizens to take 1.15 billion trips during this year’s holiday. That’s down more than 60% from 2019 -- the last pre-Covid holiday -- and more than 20% lower than 2020, when the first lockdown was imposed in the central city of Wuhan just as the holiday was starting.

How China’s Big Annual Migration Differs This Year

For comparison, AAA Travel had forecast as many as 84.5 million Americans would travel from Dec. 23, 2020, through Jan. 3, a decline of at least 29% compared to the previous year.

3. What is government doing?

Dozens of local governments have asked people to stay near their workplaces or to get virus tests and isolate for as long as 14 days before returning home to prevent the spread of Covid-19. The country appears to be falling behind on its drive to vaccinate 50 million people before the holiday, which may also discourage people from moving around. Many outside mainland China who would normally fly back are deterred by strict quarantine measures that add time and expense to any trip. In addition to Covid-19 tests before flying, Beijing has imposed a “14+7+7” schedule for people coming into the capital: two weeks at a hotel at your own expense, one more week of isolation at home and seven more days of ad-hoc health checks.

4. Isn’t Covid-19 under control in China?

Certainly compared to the U.S. or much of Europe it is. Since quelling its original outbreak in Wuhan last year, China has mounted a relentless drive to stamp out the coronavirus, often deploying resources and powers that wouldn’t be countenanced in other countries. It has tested entire cities as well as millions of frozen-food imports and the containers they arrive in. While China has reported fewer than 200 Covid-19 deaths since April, new infections continue to crop up. However, the number of cases in the latest flare-up outside Beijing numbered around 100 a day at its height, compared with roughly 200,000 cases a day logged in the U.S. in January.

5. What does this mean for the holiday?

The initial outbreak ruined the festival for many last year, so this will be the second year in a row that many can’t fully celebrate with family and friends. That doesn’t have just a personal cost but is also a hit to the economy, especially in rural areas. The annual migration is not just boom time for train and bus companies, but also provides an injection of cash into smaller and poorer parts of China, as migrant workers come home with their wages and gifts, and families spend big on meals and presents. A lot of that spending won’t happen this year. However, with more people staying in the cities, they should see an economic boost although it’s unlikely to offset the overall hit.

How China’s Big Annual Migration Differs This Year

6. And the broader economy?

The pandemic caused a lot of economic pain last year. With companies shut for months and travel restricted, millions lost income or jobs and the number of migrant workers fell by 5.2 million over the course of 2020. Although China is likely the only major economy to show growth for 2020 due to its effective control of the pandemic, top party leaders have begun to talk about “demand-side reform,” signaling concern about the uneven nature of the recovery in which household spending has lagged behind investment in real estate and infrastructure. A continuing hit to consumption means the government’s plan to re-balance the economy and make domestic demand drive growth will take even more time.

7. What’s this year’s animal sign?

Move aside rat, it’s the year of the ox -- which represents being hard-working and honest, and points to stable growth because of its low-key personality, according to chinesenewyear.net.

The Reference Shelf

©2021 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.