As spring arrives and temperatures rise, China is witnessing its annual surge in travel and outdoor activities.
But beneath the seasonal leisure lies a deeper trend.
From RV camping and cruise tourism to low altitude flights.
Many Chinese people are not just traveling, they're traveling differently.
These emerging forms of spending are now gaining strong support and the policy level.
So what is driving this change?
Is this simply a rebound in consumer confidence, or does it point to a broader shift in how people choose to spend?
And as policymakers encourage these new scenarios, what could it mean for local economies and China's long term growth?
Hello and welcome to the panel discussion of World Today.
I'm Dou Hongyu in Beijing.
To delve deeper into these questions.
We're joined by Professor Zhang Gong from the University of International Business and Economics, Assistant Professor of Economics Li Lun with the School of Economics at Peking University, and Mario Cavallo, founder and CEO of M Communications Group.
He's also a senior fellow at the center. for China and globalization.
So welcome to the show, gentlemen.
First of all, a question to all of you.
And let's start with Professor Gong.
Now that the weather is warming up and people are getting more willing and comfortable to travel and enjoy the spring scenery, what consumer spending trends have you noticed so far?
Thank you very much for having me.
The things you've just mentioned, the economics, what we call experienced goods expenditures, leisure these things represent a larger share of Chinese consumers' consumption basket.
And I think this represents a structural trend.
And this trend is inevitable in the context of China's living standard has been steadily rising.
And that's a sort of a universal phenomenon in many countries.
Expenditures on things other than food, other than Clothing, other than housing, transportation.
More and more things are spent on sports leisure, other types of experienced goods.
This is a general trend, and inevitably, China is following the same trend as many other developers.
OK, then, Dr. Li, what about you?
Have you ever noticed any new trends expanding so far this year in China?
Yeah, so we have seen people you know, especially young people, increasingly going out in this nice weather whether, to you know, view flowers to take photographs of themselves or, you know, do some camping or outdoor sports or other forms of leisure.
So I agree with Professor Gong that our spring travel is no longer just about going somewhere or buying a ticket.
It's increasingly about how do we want to spend their time, especially in this beautiful weather.
So we're seeing, for example, the spring consumption is really becoming multilayered.
So people are combining their transportation, their leisure, their dining, and also equipment rental and car rental, as well as social sharing, into one package.
So we're seeing, for example, people taking beautiful pictures into these, in these places of interest, and also sharing them on their social media.
So we're seeing a multiplier effect that strengthens both on the product consumption but also, as Professor Gong also mentioned, the experience consumption.
And that's what I think is a really notable trend this year.
Okay, multi-layer consumption.
Then, Mario, what's your point of view?
I love the topic and I want to kind of frame the theme of the discussion with two kind of famous phrases.
And one of them is just the back to nature.
You know, that's that's a big part of it is back to nature and the rising urban economies in China.
I mean, everyone knows what's happened here, particularly since the year 2000 was right when I was arriving.
I mean, it was amazing for me.
I arrived in ninety nine.
And we all know what's happened in the last 26 years.
The urbanization of the big cities.
But the rising urban economies are good for the country, rising incomes.
It's been a wonderful upward trend.
But urban life is also hectic, crowded with lots of traffic and people want to take a break and I realized that going back to nature.
We say in Chinese restore your spirit.
Sightseeing the countryside is wonderful.
I'm up here in Liaoning, my wife's hometown is Shenyang.
We've been up here for nine years.
And it's just wonderful to do that.
And in addition, there's a new, of course, social media has taken over the world.
We love to share our moments.
We write moments.
We chat moments.
That's what it is.
And all of the other China social media as well, you know, Xiaohongsu and and many others, Douyin.
And so there's this thing of vlogging our daily lives.
Oh, I'm in this really cool place, and you put up a quick video.
So this is sort of like mini travel vlogging.
So that's part of the new social media landscape as well.
And people are enjoying the idea of sharing their experiences.
And then the other phrase that comes to my mind is road trip.
You know, that's the one back in America where I was born and raised.
We're going to hit the road.
We're going to do a road trip.
And that's a special experience, much different. than getting in an airplane and going somewhere.
Okay, so go back to nature and take road trips.
You have mentioned a lot of outdoor activities.
The spring is seen as a golden season for camping. which is nothing new in China.
But now China's policy is specifically highlighting RV camping, which means recreational vehicle camping, which means you just drive a motor home outside and you live in that motor home at night.
So it looks like a mini hotel room.
So Professor Gong, why is China's policy specifically highlighting this activity?
Well, to emphasize the difference between an RV-based travel experience versus a normal, um say, a vacation you know, relying on the traditional transportation means and staying in a hotel room.
I think the the two major differences, in my view, one is that uh, rv traveling usually takes longer time.
For a more extended, longer vacation, you're going to stay in a hotel room.
If you have to stay in a hotel room, you have to stay in a hotel room for maybe two weeks or three weeks.
And it's a bit expensive, I guess.
But if you stay in a hotel room, In a vehicle which we call an aggregation vehicle an RV usually is equipped with the daily necessities.
It has a bathroom.
You can take a shower.
There's a toilet.
You can go to the bathroom.
You can do cooking inside.
There's a bed inside.
You can sleep on it at night when it's fog.
So if you do this, it's more economical.
You can do this in a longer period of time, a couple of weeks, you can do that.
That's the first major difference.
The second major difference is that it allows you to travel into more remote areas and getting closer to nature.
It used to be quite popular for people to drive an RV to areas in Tibet, for example.
Hotel is not easily accessible.
It takes a long time to hotel.
So the bottom line is that it's getting closer to nature.
And I think it's getting more and more popular because people's living standards catching up with that.
People like to take longer vacation.
People do want to take their vacation closer to nature.
And that's what they are doing.
And they can afford buying an RV.
An RV is a more expensive vehicle.
It has somewhat like a van and it's equipped and furnished very differently inside.
And also, I think from the government's policy perspective, it represents a new industry, right?
It represents a sort of a derivative area of the traditional automobile industry.
And that creates GDP, I guess.
It creates, you know, more Jobs and more revenues, tax revenues.
So that's part of the GDP growth, right?
So it's always good to see the birth of a new industry.
And this industry has just been around for quite a while, but now it looks like it's really about to take off.
It used to be quite...
Small sales numbers.
People are not used to that.
Many people have never heard about it.
Now it's getting more popular.
And I think it's quite popular among retirees, people who have, you know already, don't have a daytime work, daytime job and, and you know, extended vacation for two or three months on the road.
And i think, quite importantly, it represents a sort of a spirit of freedom that's popular in the united states, as mario was talking about.
Right, hit the road, go wherever you want to go and and totally unbound by airline tickets transportation, you just want to go wherever you want to go.
It represents a spirit of freedom, I would say.
Okay.
Yeah, so it is a great choice for what Mario just said, going back to nature and taking road trips.
But we've also seen this kind of growth in this area.
Industry reports show that over 23,000 motor homes were registered last year.
That's a 24% increase from 2024.
And the camping markets grew by over 16%.
So Dr. Li, apart from government support, what is driving this growth?
Yeah, so I mean, government support is apparently very important, because I think we can't understate how much government is, you know, explicitly talking about the development of these activities.
For example, in the 15th five-year plan, there's a direct outline, for you know, calling for developing of cruise ships yachts, RV camping and other leisure consumption.
So it's something that's directly, you know, supported by the government and recognized as a new consumption scenario.
But besides, you know, the government support, I think there is a genuine consumer demand for you know, as Professor Gong and Mario said, for freedom, for flexibility, because RV trips, instead of What we used to when we go to a trip wake up at 7 or sometimes 8 am we go to the bus with everyone else.
There's usually a crowded and very rigid timetable that we go to the conventional places of interest and we go to the tourism sites with a lot of other people.
It's not always a very comfortable and enjoyable experience.
But with RV things are different, because by design it's a vehicle that combines transportation and a portable or a mobile hotel and also sightseeing in one experience.
People can take turn to drive whenever they see something beautiful.
They can park and have a sip of coffee while taking some pictures and relax.
So this is directly going to appeal, especially for larger families, for pet owners.
Sometimes when you bring a pet you have to check with the hotel whether they want to bring.
They allow the pet to be brought into the homes.
And especially for, you know, young professionals like artists, photographers or people who are, you know, basically working a little bit during their vacations.
For example, if they want to have an urgent video call or a Zoom meeting, they can do it on their RV.
But if you're outside on the bus, apparently you can't do that.
So this flexibility and the freedom is actually driving a lot of the consumer demand.
But i'm rather, you know surprised, or where i'm more optimistic, about the size, because you mentioned that there's over 23 000 motor homes registered for the entire china last year.
I think there's definitely more room for that to grow especially, you know, for more uh, advanced or better equipped RV models and especially for RV rental, because not all of us can have the can afford to buy an RV, not to say, you know, keep it in a garage that you know have the size, and also in terms of maintenance, repairing and stuff.
So if we have a more flexible rental market for RV, I think that's definitely going to revolutionize our traditional camping, because camping Despite you know you're going away from the crowd, it seems to be a more relaxing activity.
There's definitely some social, you know, in terms of sharing with social media, in terms of being visible, there's definitely some element to it.
So I think having more accessible RVs can definitely help, you know, revolutionize camping, because you, you could turn camping into a more personalized, more almost like a statement of your identity, because you know, in modern times, people really, you know, demand for this idea.
You know unique experience not, you know, similar to everyone else.
So this expression for your identity is also going to be very important And it's probably going to be a deeper shift in lifestyle as well.
And now let's take a look at the group of people that are camping by RVs.
Just now, Professor Gong have mentioned that there are retirees who are camping by RVs.
That's true.
But if we take a look at the figures, The majority of the RV campers are actually people aged 25 to 40 in first-tier cities.
They're contributing over 70% of the RV camping market.
So, Professor Gong, why is RV camping gaining such attraction among younger generations?
And how do you assess the spending power of younger people in China today?
Well, actually, it's quite a surprise to me.
I thought the people who do this are usually people who have plenty of time.
They're typically retirees.
Obviously, as you pointed out, the largest segment is coming from people aged between 25 to 40.
My guess is that this group probably represents a little bit more purchasing power.
They can afford to buy an RV.
It's a bit more expensive than a typical automobile, I would say at least twice.
Maybe even three times as expensive, depending on the size and capability and trim level inside.
And probably also because this segment of the population are more enthusiastic about taking their life to nature, more interested in exploring, more interested in traveling.
And that's probably the reason.
Look at the statement you just made.
These are also people from first tier cities.
So I guess you know people in first tier cities are more exposed to you know a new lifestyle, popular in the West, popular in the United States.
You know, they have probably more audacious to exploring new things, but more susceptible to a new lifestyle.
I guess a change of a lifestyle uh, and i guess that that might be the driving factors here.
In any case uh, i i would imagine that uh, sooner or later, you know, the this fad about rv will spread to the retiree community.
Sooner or later.
It's going to happen because they have the time and they have the financial resources to do that.
Yes, definitely.
And then Dr Li.
It is quite interesting because RV camping has been a lifestyle in the West for quite a long time.
It's not a Chinese tradition.
Why has it started to take off in China in the past decade?
Yeah, so our other guest is probably more well-known about the history of ROE than I do, but I think it definitely has deep roots in the US, especially going back to the early 20th century, where there's development of the modern RWE and also representing a new lifestyle.
That represents freedom exploration, going to the West, into the Rocky Mountains, so on and so forth.
So compared with the US, China's market definitely started much later.
So what we're seeing right now is a delayed trend that's basically becoming more and more different from the RE culture in the US.
And especially since the 21st century, I think, In the US, RV has become more and more like a substitute for affordable housing, which is deviating from the purpose that was initially designed for.
So in China, I think it's more closer to what the RV was initially designed to.
So I think, over the past decades, what we're seeing is that we, as China, have reached the stage where a lot of households have the income, have the cars, the purchasing power.
And, as a nation, we have the infrastructures, including highways, including digital network Wifi, and also the awareness about the culture and leisure activities that makes all the RV camping, you know, a viable activity.
So this is a case of you know where demand is created or mature only after all the supporting conditions are in place.
So we have also seen that, for example, the pandemic years are also changing our travel habits as well.
So people tend to avoid these very crowded, very you know public or One hat, that physical kind of trip, and we are kind of pushing the push towards more domestic private, short distance and or outdoor trips.
So the demand
You know, persistent even after the pandemic, because there's a long lasting effect of how people think about what is a good holiday, what is can be defined as leisure.
Finally, I'd like to point out that I don't think the recent push for RV is an imitation of the Western RV culture.
I do think that RV in China is being integrated into a broader model of new consumption scenarios.
So we could think about the digital economy.
We could think about, for example, people.
Sometimes I know cases where people drive their RV into tourist sites or near tourist sites And whenever they're taking a break, they change the RV into a portable coffee shop.
So they sell coffee to other tourists while they're waiting.
When they're wrapped up, they can go to another site.
So it also combines with new business models as well.
So this is definitely going to be a part of new experience in this transition of a new digital economy in the future.
Okay, new business models and a new transition.
Now, if you search for RV camping on Chinese social media platforms, you will see people looking for recommendations of those vehicles and of the service suppliers, but a lot of people are still hesitant to go.
So Mario, what do you think are the gaps still existing in China's RV camping infrastructure and what needs to be done to support its continued growth?
Well, you know, it's so great.
I really appreciate Professor Gong's thoughts just now, because he said a very important point.
This flourishes, but only after all the supporting pieces are in place.
That's just such a great point.
And, for example, we take something for granted that has been around for so long, yet it's a key supporting piece that's in place that wasn't before.
And what is that?
The government built out the highways.
You know the highway system now is wonderful.
And then what's another piece that got built out that we didn't really we think about?
We take for granted gps in our cars, you know.
This makes everything and all the information that's in China's amazing.
You know, we use a map all the time, the detailed information that's inside the GPS.
So this makes the.
And then, of course, you know you have WeChat, you're connected to the world and all the other apps.
So this connectivity, this level of sophisticated ability makes hitting the road, makes doing a road trip 20 times easier than it was before all of these things existed.
So all of those supporting pieces are in place.
You know, and then whatever gaps that are existing in RV and camping infrastructure well, those gaps, whatever they are, they're being filled rapidly.
There's been a massive increase in camping and RV infrastructure sites, RV charging stations, plug-in stations where you plug in your electric and water.
The adoption of the new C6 license as well, the RV license, if you're towing a vehicle.
Towing an RV rather than a self-drive, you need a different license.
There's people who are doing that.
A friend of mine traveled China that way for three years.
And then for me, it's a great, happy story.
I love this topic tonight.
Because I have a bird's eye view.
I live in Shenyang, just on the south side, right downtown, just on the south side of the Qingdian Bridge, right on the Hunhe River.
And it's a five-minute walk over to the riverfront which, here in Shenyang, is a beautiful 24-hour green park wooded area.
And people and so you say, number one, what's happening?
Well, as soon as the weather turns nice, you know come, come April May, people start pitching their tents all over the park and they don't take them down at night.
They pitch their tents and keep them up all summer long and they practically live in the park and it's their holiday living.
And it's amazing.
And then they leave.
They go to work.
And they set up projectors.
They bring battery packs and set up Toenji projectors and screens and watch movies.
And they're in the park living in their tent.
So now here's the tricky point that I want to make.
There's also a parking lot, and it's an rv parking lot.
So what's happening is people are traveling from all over the world.
They're on all over china, i'm sorry, and they're on.
You know they're on a northeast china road trip.
They pull into shenyang, they pull into the rv camping parking lot over here on the huenhe river, just five minutes up the road from me, but then they pitch a tent next to their rv, Or they pitch a tent 100 meters in somewhere in the park.
So they have their tent and they have their RV.
Yeah, thank you for that sharing.
Thank you all for your in-depth analysis.
Let's have a short break.
Coming back, we'll continue our discussion.
Hello, my name is Alessandro Golombievski Teixeira.
I'm a professor of public policy management at Tsinghua University in Beijing.
I am a great listener of The Wall Today.
In my opinion, The Wall Today is one of the best China radio programs.
In the world today, we can get the best news and analysis in what is happening now in the world.
So please come to join us.
Welcome back.
You're listening to the panel discussion of World Today with me, Dou Hongyu.
We've been unraveling China's new consumer spending trends, and let's continue our discussion today.
We just talked about RV camping.
Now let's move on to another very promising and interesting area, water activities.
Now Chinese people seem to be looking for some different kinds of fun on the water, apart from buying a swimming suit and swimming or floating in the shallow part of the ocean.
According to a recent State Council briefing, the number of newly registered yachts in China has grown at an average rate of over 40 in the past three years.
And now there's a Chinese cruise brand called Adora Cruises.
It's served over one million passengers over the past couple of years.
So, Professor Gong, what's behind this surge in yacht and cruise experiencing and consumption?
That represents the frontier of enhanced consumption, I guess.
We're talking about two things.
One, of course, is taking a cruise.
I view this more as a sort of middle-class consumption item.
It's not outrageously expensive.
Many more people can afford it.
And I've done it quite a few times to the Caribbeans.
In the U.S., they have these Caribbean cruises that price at very competitive levels.
The other thing I think you mentioned is the yachts.
That's a more expensive item, I guess.
It's not a very large market.
It depends on what kind of boat we're talking about.
At the lower end, we have these inflatables, things that you can inflate.
It can be packed in the trunk of a car.
And then you have what's called an outboard motor to drive this thing.
A more enhanced version would be a small boat, dingo, this kind of a thing.
It's more or less the same concept.
But at the high end, we're talking about yachts, a small yacht, right?
You know, like a six-meter-long yacht, eight-meter-long yacht.
In the United States they have, you know, brands like Seaway Bayliner, you know those kind of more expensive boats that can actually take to the sea, to the Gulf of Mexico.
Well, I'm sorry, Gulf of America these days, you know.
And that's more expensive.
We're talking about, you know, $100,000 to $200,000 rent, right?
I mean, that's a more expensive item.
I think in China, they've been sold for over a million at least, a million yuan at least.
And I think these things are really developing China rapidly over the years.
People get richer, wealthier, they have a taste for these things.
Going out into the sea is a great venture.
So I think more and more people are doing this.
As a matter of fact, I think JD.com's boss, Mr. Liu, right?
He's talking about.
You know the similar concept of the equivalent of Tesla in the boat industry.
He was talking about building yachts.
You know, like a new kind of yachts, electricity driven as opposed to ice engine driven, and a lot less expensive much, much more than kind of a Building new boats.
He's talking about these things.
Much more affordable also.
So I think that might represent a great future.
I think that's an untapped market.
There's a lot of potential in China.
So I think that's definitely something that can drive a bit of economic growth in a local economy.
And then Dr Li.
Chinese officials have indicated that yacht and cruise tourism will be key growth areas in the coming years.
Do you agree with them?
And why do they see such a potential now?
Yeah, I definitely agree.
I think these two types of marine can really unlock a lot of spending across transportation hospitality tourism, retail and culture at the same time.
Because if you have been to a cruise ship, you would know that there are a lot of people working on the cruise ship, whether in the kitchen or in the service sector, in the cleaning department, so on and so forth.
So we're talking about a lot of employment and the trip is going to support many kinds of consumption, both the ticket on the cruise and also in terms of fine dining, in terms of why, in terms of experience and also when the cruise ship goes to other destinations, there's going to bring higher consumption to the local government, to the local economy as well.
Now talking about yacht is more for the affluent or the richer group of population, but that's definitely Also going to drive growth, but probably less so than the cruise which is facing the majority of the population.
But I do think there could be some possible challenges towards the development of yacht culture because at least in China, at least in the northern part of China where I grew up, I don't think there is a very popular yacht culture where people buy yachts and put them on the dock.
Maybe it could be something in the future.
But I do think there is a slight difference between the Chinese culture, where people, for example, meet up in restaurants, versus in the West, where people meet up in restaurants, golf courts or having a yacht, where people can have these social events.
So this difference in culture may explain some of the lack in terms of China's growth in the yacht department.
But I do think they do have potential because right now, in proportion to our population size, the size of these marine leisure, both yacht and cruise, is relatively underdeveloped.
So I do think there's going to be a lot of room for both these sectors to mature in the future.
A huge potential.
And now let's again take a look at the major consumption power in this area.
This time it is the elders.
For example, during this year's Spring Festival, more than one-third of cruise passengers getting aboard in northern China's Tianjin were seniors aged 60 and above.
Mario, why is cruise tourism so popular among the elders?
And what does this tell us about the purchasing power of China's senior population?
I'm so happy I could tell you a lot about this from my own personal experiences with my own family.
In addition to two things, I've worked on the cruise ships out of China twice.
One time I did a contract on Royal Caribbean out of the Shanghai Baoshan port and worked on the ships that were bringing the Chinese passengers over into South Korea and Mexico.
So I really got an inside view of the situation, which is not new.
It's been growing tremendously.
And this was my first time back in 2009.
And Royal Caribbean and maybe one or two other ships were there at the Shanghai Baoshan port.
Well, 10 years later, they'd expanded the port.
And then there was like 10 ships from all the different cruise lines Princess, Royal Caribbean, Costa.
The second time I worked on Costa Atlantica.
And it was the same thing.
So actually, this cruise expansion, it's not to say will grow.
It already was booming from 2009 through 2017.
It was booming, booming, booming.
And then, of course, we know what I'm going to say.
Next, the pandemic utterly destroyed it.
It came to a screeching halt, and that's unfortunate.
So now it's being revived, but it was already.
It was on such a strong track.
Royal caribbean was making tons of money and the characteristics are exactly as, as dr lee and professor john gong has already been saying.
Number one elderly passengers.
Number two, inexpensive cruises.
Number three, they're going to Korea and Japan to go shopping.
They're so happy to go and buy stuff and bring it back.
You know, and They discovered the wonderful world of cruising, which I've been on many.
I think it was Dr. Lee who said you've been on a lot of Caribbean cruises.
Yeah, they're amazing.
They're an amazing experience.
And the reason that they're so good for elderly is because they're an all-encompassing experience.
So everything is once they step on the ship.
The service level is extremely high and elderly need more attention.
And there's activities throughout the day and meals throughout the day and Broadway shows in the evening.
And there's five bands on every ship.
And it's amazing.
We did this.
We took my mother-in-law, you know, my elderly mother-in-law.
We took her two years ago on to the Mengshang Shenzhen.
The Mengshang Shenzhen is in Tianjin.
And it's a beautiful ship.
It was an old princess cruise ship, which they purchased.
It's a beautiful ship.
This is out of Tianjin.
This is out of Shanghai.
I think these are the two main ports now.
For the elderly to go on a ship, my mother-in-law, and she doesn't like to go anywhere.
She's a very local conservative person, and that's great.
So she left the country.
She left the country of China for the very first time when we brought her on that ship to Korea and Japan, which was a great experience, you know, a feather in the cap for the family.
And guess what?
My mother-in-law had a wonderful time.
She loved it.
She just couldn't believe that.
Everything was right at her fingertips, 24 hours a day on a cruise ship.
And elderly need that level of attention and care in terms of guest services.
You know that kind of a thing.
Thank you Maria, for all those sharing, especially leading us to see what it's like during a cruise trip.
I might add just a little note here.
People from China love gambling.
I don't know if it's legal.
It's legal to gamble on the ships off the shore of China, I guess, right?
Yep, that's another reason.
Yes, that's right.
And as soon as the ship came, the ship has to clear customs, and then the ship has to clear the 12-mile international waters barrier and then they open the casino.
Okay, good to know.
But for many of us, cruise and yacht tourism still sound like luxury experiences only reserved for the few, the wealthy.
But as Muriel said, there are inexpensive projects.
For example, if you look for those projects on China's top traveling booking platform, there are such projects with a six-day cruise from Tianjin to Jeju Island and Incheon in South Korea.
It's less than 2,000 yuan per person, about 300 US dollars.
It's even cheaper than traveling there by oneself, I guess.
So, Professor Gong, with such prices, how can we better promote cruise and yacht tourism to a broader audience?
Yeah, well, I mean, cruise is a middle-class thing, I've already said.
It's actually not that expensive.
You have to be a little bit careful.
I think the price you're seeing is probably at the bottom deck of that ship.
You don't have much of a view at all.
It's probably inside the... the outside cabin, what they call it.
It's inside cabin.
So we have no view at all.
Usually if you have a decent view outside cabin.
If you have a balcony, it's going to be more expensive than that.
Having said that, I think it's still very affordable to the middle class in China.
But a yacht is a totally different story, I would say.
A yacht is at least over a million yuan, at least in my view.
And my understanding is that I know a little bit about this industry in China.
The issue is actually not even with the cost of owning a yacht.
The issue is about the docking space.
We don't have an infrastructure here in China that is built for docking many, many more ships or yachts like this.
And it's also a chicken and egg problem.
If you don't have many yachts, investors are not going to build these docks.
If you don't have these docks,
People are not going to buy boats because it's a hassle to find a place to park.
And then it's outrageous expensive just to do the maintenance and pay for the parking.
So I think it needs development.
I don't think it's going to be...
I don't think it should be too expensive for developing this kind of infrastructure, given the fact that investors and people rich people, wealthy people, affluent people can certainly afford to pay over a million yuan for something like this in China, that there are millions and millions of people who have this kind of affordability.
So I think it just needs better planning, better government coordination policy to support this.
So I think over time the infrastructure for the yacht industry, for yacht consumption around major, larger cities, coastal cities in China will eventually develop in my view.
It's just going to take some more time.
We've talked about camping and water activities, which are not only about enjoying the views, but also about experiencing and getting fresh experience, as one of you mentioned at the beginning of the show.
Do you think that?
Are we seeing a shift from traditional sightseeing to more experience-based consumption, or is there a combination?
What is driving this change?
Professor Gong.
Yeah well, I think this is a structural pattern here that once people get beyond the level of better food, better housing, better cars, they'll be looking for something new, right?
And these are the new frontiers.
And, as a matter of fact, these new frontiers are relatively mature in more developed economies in the West, in the United States for example.
And they're starting to be developed here in China.
Some of them have already been developed, as Mario has already mentioned.
So all of these things, I think anything that you see in the West, where rich people spend, are going to be exactly happening the same way in China as well, sooner or later.
So I think well, we're just doing some catch up and you know, these things will develop eventually.
And I think, from government's point of view, as I said, we need better policies to facilitate, to exacerbate, to accelerate this kind of this growth and make it happen earlier and faster.
And Mario, what do you think is driving this change?
The more emphasis on experience-based consumption.
You know, we just have this amazing thing happened in our generations, which is just the opening up of China to itself.
Not to the world, but to itself.
I've been here 26 years and I'm just amazed at how wonderful life in China is.
And I see the same thing happening for Chinese people in this society.
And you know don't get me wrong, of course you know people who you know.
Low income households have it tough in every planet, in every country of the world.
It doesn't matter what country it is.
But you have this massive middle class that's very, very comfortable.
I mean, it's a middle class far larger than the entire population of the entire United States.
And so this number of households that have what we call in economics consumer discretionary income.
Right.
So that's what's driving it, along with a lot of the cultural points that we've mentioned and talked about.
And by the way, I wanted to go back and mention about yachts.
Actually, it has developed substantially, at least down in Sanya, down in Hainan Island.
So down around Hong Kong Zhuhai, but particularly all around Hainan Island, even up in Haikou and over on the side Boao.
So there's been – we've had it for years up here in Qingdao as well.
But but it's most substantial now down in Sanya.
And it's, of course, yeah, it's for people who who can afford such riches.
It's for the millionaires.
But the middle class and the category that I like to call the upper middle class.
The upper middle class people in urban China, the 10 major cities, the 20 major cities.
You've got an awful lot of households out there who are making 15000 20000, 30000.
50 and more thousand RMB per month.
And there's a lot of those households and they would be called upper middle class because, even though you're making 30 or more thousand RMB a month in the household, you're living in a city like here in Shenyang, where the cost of living is incredibly low to live in a wonderful, modern urban city.
And so Making 30000 RMB a month as an upper middle class household here in China.
It's the equivalent of making well over 100000 a year in the United States, because the expenses are so much lower the cost of living on a daily basis.
And so that consumer discretionary income is driving it.
The other cultural and economic and urban lifestyle trends that we've talked about, And it's going to continue.
We see it happening.
It's going to continue.
The market is responding and entrepreneurs are responding.
You don't just go on a road trip.
You go on a road trip and then you stop and you find a guy with a van who set up a coffee shop in the back of his van.
Now he's feeding his family.
And so it's building upon itself, which is just wonderful to be a part of.
We've been talking about consumers so far, which is actually a focus of today's show.
But, Professor Gong, as the government encourages new consumption scenarios, what signals does it send to the supply side, from manufacturers to service providers?
This is one area that I really worry less about.
I think wherever there is a market, there will be producers, there will be companies, particularly in China.
Entrepreneurs here in China are just great in terms of seeking these new opportunities.
And everywhere you go, every market segment you go, you see fierce competition.
So I think, as long as the government sets out a good policy that's pro-growth pro-industry pro-market, as long as it has policies to make sure these safety standards are maintained.
We didn't talk about...
For example, general aviation is a great topic I'd like to touch if you want.
You know, there's safety standards there that needs to be maintained by the government.
And I think if we have these policies in place, the market will just develop.
The entrepreneurs here will just go out and, you know, work like hell.
Work their butts off to try to seek new opportunities.
So I think I'm very confident that this is a country where these type of opportunities will be pursued by both consumers and manufacturers.
Okay, a lot of confidence.
Then Dr. Li, what do you think?
What are these emerging new consumption scenarios mean to the supply side?
Yeah, so I think for manufacturers, I think they definitely should innovate on their products.
So basically not only just sell products but also think about all the scenarios that the products can be used.
For example, when the RV manufacturing is making a vehicle, they need to realize it's not just a vehicle, it's part of an ecosystem, it's part of a potentially a business model.
So maybe having a TV, having a fridge, having more small electronics embedded inside is a good idea.
So when we're talking about a cruise ship, it's not just a transportation, it's actually a service platform or a floating hotel.
So you need to have all of these features built inside.
So that also goes for service providers as well because, you know, we have to improve the quality of the service and to have a more integrated and consumer centered type of service, because right now consumers are having this whole package of, you know, during their entire trip they will have their transportation accommodation entertainment, all the customer service working together in a smooth fashion in order to have a very satisfactory trip.
So that means for service providers, for example for travel agencies, they need a very strong coordination between different sectors to make sure that, for example, the tourists have a very good experience.
And also in terms for investors and local governments.
I think the future growth is definitely going to come from these innovational or cross-sector platforms that's going to combine, for example, the most cutting-edge products that's being manufactured, but also with the world class services, and also in terms of the content or with the digital infrastructure.
For example, you need to have good internet, you need to probably have good support for short videos or so on and so forth.
So this is also going to matter for uh you know, for the local governments as well, because that's uh often, you know, the the devil is in the details.
So how much uh you know your ability to integrate all of these resources across different sectors are going to matter how many tourists are going to actually visit your city and how much revenue they're actually going to bring.
Ideas do matter for the suppliers.
And finally Maria, can we get your views here?
Because spring is definitely a peak season for traveling and going back to nature, but nature is not always as beautiful as spring all year round.
The real question is how can local authorities and businesses turn this seasonal enthusiasm into a momentum that lasts all year round?
Well, I would always say that they can do that.
They need to do that by adjusting to the seasons.
They can't sustain.
You can't sustain spring fever, right?
Spring fever is spring fever.
And then when it's over, it's over.
And then you enter the freer, the hot months of the summer.
And that's a different experience.
And then you entered the beautiful fall season, right?
And everybody loves the fall season in China.
I mean, here in the north, even in the central area and in the south.
I mean, everybody loves the fall season here in Dongbei.
It's magnificent.
So the government can do it.
They can keep that seasonal enthusiasm going.
They need to work with the suppliers.
They need to keep doing good marketing and PR plans.
You know, I just was at an event where I was chosen to be a new international ambassador for the brand new Shenyang International Communications Center, which the Shenyang municipal government set up to bolster and create more international communications outward into the external world.
And they asked me what I thought.
And I said, well, you need more of this.
That's what I said.
This is what you need to do.
You're not doing enough of it.
I'm glad you're doing this.
And we need to keep doing more.
We need to do marketing and PR.
We need to promote. and you're promoting and doing what?
How do you keep that momentum going?
By highlighting what's best in each region, in each city, in each area during the different seasons.
Again, you've got the RV camping culture.
That's great.
It's very inner Mongolia, up here in the northeast.
Great.
But then come wintertime, it's a different ballgame.
Now you want to keep that seasonal enthusiasm going, but you need to switch your focus to families that like winter and the skiing environment uh, the skiing uh culture.
So the, the government needs to be aware and savvy of.
You know what's hot in which region during all the different seasons of the year.
So then, dr lee, what do you think?
How can we keep this travel and spending trend last all year round?
Especially, how can localities in China adjust to their own conditions?
Yeah.
So I agree with Mario's point that there are some attractions or there's some seasonality in terms of what you can offer.
There's also need to be more focused around promoting these activities.
So I think a good example to answer your question is Chongli, which is a popular winter skiing destination.
But we're seeing, for example, a lot of effort to try to turn the seasonal traffic into a year-round tourism.
For example, in summer, we also see a lot of tourists actually visit resorts in Chongli.
Because you know the summer temperature there are definitely lower than Beijing, often around 18 degrees Celsius.
So activities like mountain biking and hiking are becoming very, very popular in Chongli in the summertime.
So that's the direction I think a lot of local government could take because, instead of relying just on one peak season, they should actually work with the resort to build an all-year-long destination brand where they can offer different experiences throughout the year.
So we are seeing Of course, in Switzerland, in New Zealand, similar features.
So ski towns in the winter can be turned into, for example, centers or hubs for outdoor activities like skydiving and so on and so forth.
So this is one thing that the local government can offer.
And secondly, I think the local government should definitely double down in investing in the basic infrastructure.
That's including, you know transportation parking, for example, for the rvs that, as we mentioned uh, building of campsites which can be used pretty much all year long, and also to have, you know, the necessary safety system and public services that's needed.
Sometimes, when people go to an rv park, they don't find enough, you know tap, water and or bathroom, so make sure to have enough of those.
And i think finally, i think, businesses need to shift from a how to keep a good amount of traffic towards how to have more retention for the customers.
Okay, that's all for this edition of World Today.
Thank you so much for listening.
Bye for now.
