This article originally appeared on Jing Daily, our sister site.

What Happened: Golden Week is China’s first major test post-COVID-19. According to official estimates by the Ministry of Culture and Tourism, 550 million domestic trips will be made this year. Ctrip has a more ambitious forecast, placing the number well over 600 million. It is worth noting that the number is below the 2019 level when nearly 800 million tourists traveled domestically. CNBC highlights that the Golden Week extravaganza might have helped industrial production expand before the break, since factories prepared for the long holiday. According to China’s National Bureau of Statistics, China’s September manufacturing PMI score was 51.5 as compared to 51.0 in August.

Domestic consumption during the golden week is expected to recover to near pre-pandemic levels. Source: J.P.Morgan

Why It Matters: With global tourism brought to a standstill, China’s domestic travel sector is booming. CNN states that many flights are already sold out. And China State Railway Group forecasts a total of 108 million train rides from September 28 to October 8. Moreover, certain destinations have seen higher demand because of their allure as glamorous shopping destinations, with Hainan and Macau emerging as the front-runners thanks to their retail infrastructure and alluring tax-free quotas. In fact, Xinhua reports that since July 1, Hainan has increased its annual tax-free shopping quota from 30,000 yuan to 100,000 yuan per person each year. “Bookings to Sanya [in Hainan] are already 25.5 percent ahead of last year,” Olivier Ponti, vice president of insights at ForwardKeys told Macau Daily Times.

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At the same time, the Macao Government Tourism Office has a more practical approach, emphasizing that a 50 percent occupancy for Golden Week would be a “good sign,” indicating the revival of the sector. Evidently, holiday retail sales are expected to skyrocket due to pent-up-demand. This presents an unique opportunity for domestic retail. Especially, brick-and-mortar luxury retailers that understand the holiday’s importance and are in a strong position to build upon early gains after lockdown. In addition, the food, alcohol and non-alcohol beverage sectors will likely rebound because of the gift giving culture. We forecast sales for Moutai, the popular distilled Chinese liquor, to jump due to strong brand equity, the Chinese etiquette and the alignment with the local elite. With so much of the world still struggling to manage the pandemic, Golden Week presents a unique opportunity for China to gauge what post-COVID recovery looks like. The world is watching.