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Nomura: Heightened Covid Curbs To Weigh On The Economy In Coming Months

CHINA

Nomura note that “according to the Ministry of Culture and Tourism, during the Mid-Autumn Festival, national domestic tourism trips and revenues were down 16.7% and 22.8% Y/Y, respectively, worsening from contraction of 10.7% and 12.2% during the Dragon Boat Festival (3-5 June). Compared with pre-pandemic levels in 2019, tourism trips and revenues were down 27.4% and 39.4%, respectively, during the Mid-Autumn Festival."

  • “For other holiday-related data, the Baidu mobility index was down 14.0% Y/Y, overall passenger trips were down 37.7% Y/Y, movie box office revenues were down 30.0% Y/Y, and new home sales volumes in 30 major cities were down 56.7% Y/Y.”
  • “The worsening business activity was mainly due to the tightened Covid control measures, as individuals have been advised to stay local and avoid unnecessary trips during the Mid-Autumn Festival and National Day holiday (1-7 October). As a tighter PCR test rule for domestic travel has been imposed from 10 September to 31 October, and the rule is likely to be either extended or reintroduced afterwards, we believe travel for family gatherings, tourism and retail sales will be severely hit in coming months.”
  • “We maintain our view that the zero-Covid strategy may continue following the 20th Party Congress in October.”
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Nomura note that “according to the Ministry of Culture and Tourism, during the Mid-Autumn Festival, national domestic tourism trips and revenues were down 16.7% and 22.8% Y/Y, respectively, worsening from contraction of 10.7% and 12.2% during the Dragon Boat Festival (3-5 June). Compared with pre-pandemic levels in 2019, tourism trips and revenues were down 27.4% and 39.4%, respectively, during the Mid-Autumn Festival."

  • “For other holiday-related data, the Baidu mobility index was down 14.0% Y/Y, overall passenger trips were down 37.7% Y/Y, movie box office revenues were down 30.0% Y/Y, and new home sales volumes in 30 major cities were down 56.7% Y/Y.”
  • “The worsening business activity was mainly due to the tightened Covid control measures, as individuals have been advised to stay local and avoid unnecessary trips during the Mid-Autumn Festival and National Day holiday (1-7 October). As a tighter PCR test rule for domestic travel has been imposed from 10 September to 31 October, and the rule is likely to be either extended or reintroduced afterwards, we believe travel for family gatherings, tourism and retail sales will be severely hit in coming months.”
  • “We maintain our view that the zero-Covid strategy may continue following the 20th Party Congress in October.”