Rich or poor, young or old, China’s 1.3 billion are about to embark on the biggest movement of people in the world to celebrate the Lunar New Year with family and friends.
Factories will be shut, schools deserted, government offices closed.
Cash-stuffed red envelopes will be handed out by bosses to employees, parents to kids, and elders to the young.
About 2.8 billion trips will be made, including 295 million on board trains, according to government estimates.
Spending at retail and restaurants in the holiday week last year totaled 610.7 billion yuan, or almostUS$100 billion.
Between dumpling feasts and firework shows, spare a thought for the headache all of this poses for the People’s Bank of China, which has to ensure there’s enough liquidity to fund the binge of travelling, shopping, drinking and gifting.
As if juggling interest-rate liberalisation, yuan internationalisation and credit risks with the need to keep the economy from slowing too sharply isn’t hard enough, the PBOC has been shoveling cash into the system via reverse repurchase agreements (where the central bank buys securities from banks), expanding a standing lending facility and doing whatever else it can to ensure money markets don’t seize up.
Compounding the headache this year, some 24 IPOs will lock up about two trillion yuan, according to estimates. — Bloomberg