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What can China's autumn festival tell us about the state of the country's economy?

LEILA FADEL, HOST:

China is in the middle of an eight-day nationwide holiday to celebrate the Mid-Autumn Festival and National Day.

A MARTÍNEZ, HOST:

The government is hoping it'll give a big boost to the economy. And tourists have, indeed, been flocking to sites such as the Great Wall, the Forbidden City and this shopping district in Beijing.

(CROSSTALK)

FADEL: NPR China correspondent John Ruwitch stopped by there the other day to take the pulse, and he joins us now. Hi, John.

JOHN RUWITCH, BYLINE: Good morning.

FADEL: Good morning. So give us a sense of how people are spending their Golden Week holiday.

RUWITCH: Well, they're hitting the road. The government expects nearly 900 million domestic trips to be made during this week.

FADEL: Wow.

RUWITCH: Those are journeys on trains, planes, boats and so forth. And analysts expect that to generate more than $100 billion worth of revenue, all told. We'll have the final tally in a few days. Those numbers would actually be improvements on recent years and are pretty decent compared with pre-pandemic numbers.

But on the street, you know, some people say it still feels like something's missing. We talked with a guy named Wang Xinglong. He sells these kind of hand-blown glasslike sculptures that are made of melted sugar that hardens. You can eat them. Kids really dig them. But he's a little bit concerned.

WANG XINGLONG: (Non-English language spoken).

RUWITCH: He's saying here that he thinks people are being conservative about what they spend. He says there's a ton of people out and about, and it was crowded there, but they aren't spending like they used to. He's not selling as much as before. And he points out that fewer people are actually carrying shopping bags, meaning that they hadn't bought anything and they're just there for the experience.

FADEL: So despite the crowds, it sounds like the economy hasn't quite turned a corner yet, right, John?

RUWITCH: Yeah, it kind of feels that way. Look; people expected that when the government dropped its tough COVID restrictions almost a year ago that the rebound would be a lot stronger than it has been. When that didn't happen, analysts and economists started to worry. There's been a lot of hand-wringing.

But I talked to Andy Rothman about this. He's an investment strategist at Matthews Asia, which is a fund management company. He says he thinks that the pessimism has been overdone. The data does show that the economy's weak, but it's improving and certainly not approaching a crisis. He points to things like household income, which is up compared with 2019. Retail sales, EV sales have been soaring.

ANDY ROTHMAN: I think the biggest problem facing the Chinese economy right now is a lack of confidence in government policies on the part of entrepreneurs - the small businesses that drive the Chinese economy, that employ 90% of the urban workforce and create all the new jobs.

RUWITCH: Right. And that's been a real issue. He thinks policy's starting to shift to address it. But, you know, that's created a wariness about making investments, which impacts the future health of the economy. It sort of underpins this weak consumer sentiment that we saw in Beijing, too.

FADEL: And there's another big problem out there - the real estate sector, right?

RUWITCH: Correct. It's a sector that accounts for about a quarter of the Chinese economy. It's where about three-quarters of all households in China park their wealth. The government's been trying to deflate this massive real estate bubble without doing major damage to the economy. But there's a lot of nervousness around it. And it's recently centered around this company called China Evergrande. It's one of the biggest property developers in China. It's been teetering sort of under the weight of more than $300 billion in liabilities. And last week, it said its chairman is under investigation - is the subject of a criminal investigation. That got a lot of people's attention, and it's sort of taken some of the luster off Golden Week.

FADEL: NPR's John Ruwitch in Beijing. Thanks for that update.

RUWITCH: You're welcome. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Leila Fadel is a national correspondent for NPR based in Los Angeles, covering issues of culture, diversity, and race.
John Ruwitch is a correspondent with NPR's international desk. He covers Chinese affairs.