Travel within China surprisingly rose from last year’s levels during the Chinese New Year holiday. The surge occurred despite the threat of Omicron and COVID-related restrictions in several regions. Stronger population flows boosted spending on catering, transportation, other services and likely overall consumption as well. However, with more migrant workers displaced from worksites relative to last year, industrial production and manufacturing output should be lower early in 2022. The balance of these effects points to continued weakness in cyclical momentum in China’s economy at the start of the year.
