Many economists believe that China will escape a slowdown similar to Japan’s

For the past several years, a persistent question has followed China’s economy: is it heading toward a “lost decade” like Japan’s in the 1990s? Property corrections, cautious consumers, deflationary pressure, these parallels worried a lot of international businesses. Some pulled back from China entirely. Others waited. In 2025 and into 2026, the picture is becoming clearer, and for those who stayed in, the outlook is more positive than the headlines suggested.

This article covers what economists are saying now, what China’s government has done in response, what this means for outbound tourism spending, and what smart businesses are doing with that information.

The Japan Comparison: What It Gets Right and What It Misses

The Japan comparison has been the dominant frame for China’s economic slowdown discussion since 2022. Japan’s “lost decade” began after a real estate and stock market bubble burst in 1991, leading to 10-plus years of deflation, stagnant growth, and a banking crisis. The parallels with China were superficially compelling: a major property correction, a slowing consumer economy, and a demographic challenge with a falling birth rate.

But most serious economists point to key differences. China still has significant urbanization left to complete. Its government has more direct control over the economy and banking system than Japan’s did in 1991. Chinas travel market and consumer base, at 1.4 billion people, have not yet reached full consumption maturity. And China’s policy toolkit is far more active: the government has used interest rate cuts, property market support measures, and direct consumer stimulus in ways that Japan’s government did not in the early 1990s.

The consensus view in 2025-2026, among economists at Goldman Sachs, Nomura, and the IMF, is that China will avoid a Japan-style lost decade. Growth will be slower than the 8-10% era, but likely in the 4-5% range, which is still among the highest of any major economy globally.

The Real Estate Correction and Consumer Confidence

China’s property sector did undergo a serious correction from 2021 to 2024. Developers like Evergrande and Country Garden faced defaults, property prices fell in most major cities, and middle-class household wealth, much of it tied to property, contracted. This had a real effect on consumer confidence and spending.

However, by mid-2024, the government had stepped in with a broad package of property market support: lower mortgage rates, relaxed purchase restrictions in major cities, and direct subsidies for first-time buyers. Property transaction volumes in Shanghai, Beijing and Shenzhen picked up noticeably in late 2024. Consumer confidence indexes improved through the first half of 2025.

The government also launched a broad consumer stimulus program in 2024-2025, including trade-in subsidies for cars and appliances, vouchers for domestic travel and restaurants, and tax incentives for small businesses. The effect on sentiment was meaningful, it did not erase the caution of the preceding years, but it shifted the direction of travel.

What This Means for Chinese Outbound Tourism Spending

In 2026 Chinese outbound tourism is showing resilience that many analysts did not expect three years ago. Ctrip’s international booking data shows outbound trip volumes in 2025 at 155 million, and forecasts point to 190-200 million in 2026. These numbers are driven by several factors that do not depend on a fully confident consumer economy.

First, the FIT traveler is typically from the middle-to-upper income bracket, a group that was less affected by the property correction than lower-income households. Second, accumulated travel desire from the COVID years is still a motivating factor for many Chinese travelers who postponed international trips from 2020 to 2022. Third, outbound travel is increasingly seen as a status signal and a form of self-investment, particularly among the 30-45 age group, which means it is somewhat insulated from general economic caution.

International businesses that focus on premium and upper-mid market Chinese travelers are in a strong position for 2026. Budget-focused strategies aimed at value-seeking mass market travelers may be more exposed to continued caution in consumer spending.

What Smart Businesses Are Doing in 2026

The companies performing well in China’s outbound tourism market in 2026 share a few characteristics. They did not exit or pause during 2022-2023. They maintained their Chinese digital presence, kept their Ctrip listings current, and continued posting on Douyin and Xiaohongshu even when booking volumes were lower. When the market came back, they were visible and trusted. Companies that paused had to rebuild from zero.

They also moved up market. As middle-class consumer caution persists, the clearest growth signal in Chinese outbound tourism is in the premium and luxury segments. Properties and experiences that offer genuine quality, with clear Chinese-language communication and easy payment, are seeing strong demand. Those competing on price are facing more pressure.

Key Trends in China’s Economic and Tourism Outlook for 2026

• IMF forecast for China GDP growth in 2026 is 4.5%, among the highest of any G20 economy
• Chinese government consumer stimulus programs totaled over $200 billion USD in 2024-2025
• Outbound tourism spending recovered to 95% of 2019 levels by end of 2025
• Premium and luxury international travel from China grew 28% in 2025, faster than the overall market
• Consumer confidence index improved by 12 points between January and December 2025
• Property market stabilization in first-tier cities has reduced household wealth anxiety among high-income consumers
• The “experience economy” is growing in China, with spending on travel and dining growing faster than on goods

Philip Chen’s Take

“A lot of international businesses made the mistake of reading China’s economic headlines in 2022 and 2023 and treating them as a reason to pause. That was a costly error. The travelers who were going to spend money on international travel kept doing so. The brands that stayed active, kept their Chinese platforms updated, and maintained trust with Chinese consumers are the ones seeing the strongest results now. Caution is understandable, but it should not translate into absence.”

Philip Chen, GMA Senior Consultant.

The Developer Who Almost Walked Away from His Best Year

Marcus Tanaka was sitting in his office in Bangkok in September 2023, scrolling through news articles about China’s property market. Evergrande’s collapse was dominating financial media, and analysts were competing to write the most alarming headlines about Chinese consumer spending. Marcus ran a mid-sized property development company with three luxury condominium projects in Phuket and two in Bangkok, targeting international buyers.

Chinese buyers had been his strongest segment in 2019, accounting for 35% of all sales. Then COVID had stopped everything. He had rebuilt his Chinese marketing infrastructure during 2022: a WeChat official account, a Xiaohongshu presence, listings on Chinese property platforms, and a partnership with two Chinese property agents based in Shanghai and Shenzhen. The campaign was beginning to generate leads again when the property crisis news hit hard in late 2023.

He called a meeting with his marketing director. The proposal on the table was simple: pause the China campaign entirely and redirect the budget toward the European and Australian markets, which seemed more stable. The logic was sound on paper. Why market luxury Thai property to Chinese buyers at the exact moment Chinese consumer confidence was at a 10-year low?

His marketing director, a Thai woman named Nattaya who had spent four years working in Shanghai, pushed back. She pointed out that their Chinese buyer profile, professionals aged 35-55 with high incomes from the finance and technology sectors, were not the people losing money in Evergrande. Their assets were liquid, their incomes were stable, and they were, if anything, more interested in moving wealth into safe international property precisely because the Chinese property market felt uncertain. They were not retreating from international investment. They were accelerating it.

Marcus decided to keep the campaign running. He increased, rather than reduced, the Xiaohongshu content, focusing on Thailand’s lifestyle appeal and the security of international property ownership. He ran a Douyin campaign showing the Phuket projects’ sea views and showing the buying process simplified for Chinese investors. He hosted a group of 15 qualified Chinese leads on a “property inspection tour” in November 2023, covering their flights and accommodation.

Twelve of those 15 leads bought units. By the end of 2024, Chinese buyers represented 41% of Marcus’s total sales. In 2025, that figure stayed strong: 280 units sold to Chinese investors across his five projects, his best year on record, and a result that would have been impossible if he had paused the campaign in late 2023.

The lesson Marcus took away was not that the China economic headlines were wrong. It was that the segment of Chinese consumers who buy international luxury property do not always move in the same direction as the general consumer confidence index. Understanding your specific Chinese buyer, rather than reading the broad headlines, is what makes the difference.

How GMA Can Help

GMA helps property developers, luxury brands, and tourism businesses that want to reach Chinese consumers with the right message at the right time. Our services include:

• Chinese buyer persona research to identify which segments are active and spending in your category
• Xiaohongshu and Douyin content strategy for property and luxury tourism brands
• WeChat official account management and lead generation campaigns
• Chinese property platform listing management and optimization
• Hosted buyer trip organization for qualified Chinese investor groups
• Full-service China marketing through GMA’s China advertising services

Whether the economic news from China looks positive or uncertain, the right Chinese segment for your product is probably still buying. We help you find and reach them. Learn more through our WeChat advertising page.

About GMA

Since 2012, GMA has helped 500+ brands connect with Chinese consumers across tourism, luxury, education, and real estate. Our team combines deep knowledge of Chinese digital platforms with real campaign experience across more than 30 countries. We have placed content on Douyin, Xiaohongshu, WeChat, Ctrip, and Mafengwo for clients ranging from boutique hotels to national tourism boards. Our work is practical, data-informed, and designed to generate real bookings, not just impressions. We know what the Chinese traveler of 2026 expects, and we help you deliver it.

About the author: Claire is a Digital Tourism Specialist at GMA. She has spent 6 years helping hotels, destinations and brands attract Chinese travelers. She writes about what works in the Chinese market in 2026. Read more at our services page.

Chinese Sources

• www.mct.gov.cn (文化旅游部)
• www.ctrip.com (携程 Ctrip)