China has decided to extend its national public holidays by two days starting in 2025, a move analysts said may be part of the country's unfolding policy agenda to directly boost consumption given elevated external uncertainties.
In an announcement on Tuesday, the State Council said the Spring Festival holiday was extended from three days to four days, to include the eve of the Chinese Lunar New Year. In addition, the Labor Day holiday was increased from one day to two days, with May 2 added, effective from next year.
Liu Chunsheng, an associate professor at the Central University of Finance and Economics, said the move not only responds to people's need for more leisure time but helps bolster consumer spending and stabilize the whole economy given the vitality of holiday spending seen in recent years.
Analysts said the holiday extension seems to be a more direct support for consumption following a raft of broader policy measures to correct insufficient demand.
On Friday, China allocated 10 trillion yuan ($1.38 trillion) in new fiscal funding to replace local government hidden debt to mitigate risks and free up local fiscal resources for economic development, following measures to ease home buying costs and channel more funds to the capital market.
UBS Investment Bank's Chief China Economist Wang Tao said while the measures to stabilize housing and stock markets could drive consumption via wealth effect, people were still looking for income and consumption subsidies to households and measures to support employment.
Wang said these measures were yet to be unveiled, and may be announced in 2025 during the two sessions.
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