Sino Strategies: China's Influence & its Implications for the U.S.

On October 1st, the People’s Republic of China (PRC) celebrated its National Day. The National Day holiday is an annual public celebration commemorating the proclamation of the foundation of the PRC. The celebration typically lasts seven days, referred to as a “Golden Week” in China, and encourages people’s enthusiasm to travel, shop, and engage in cultural activities organized and regulated by the State Council. This year, National Day Golden Week is linked with the traditional Mid-Autumn Festival and extended to eight days, lasting from September 29th to October 6th.

Over the past few years, in addition to granting the Chinese population a week of economic consumption and personal travel, National Day has also served as a forum for Xi Jinping to promote his political agenda and for international activists to speak out against the PRC’s perceived acts of political injustice and overreach. With National Day Golden Week coming to a close for the year, this piece examines the cultural, political, and economic significance of the Chinese holiday and considers the holiday’s implications for U.S. policymakers, businesses, and consumers.

A Brief History

On October 1st, 1949, Mao Zedong, then leader of the Red Army, declared the founding of the PRC in Tiananmen Square before a crowd of 300,000 people. This declaration followed a civil war in which the Chinese Communist Party forces led by Mao emerged victorious over the nationalist Chinese government.

On December 2nd of that same year, during a meeting of the Central People’s Government Council, October 1 was officially declared as Chinese National Day. This also marked the end of the civil war between the Chinese Communist Party and the Chinese government. On National Day every year from 1950 to 1959, enormous military parades and festivities were held in commemoration of Mao’s declaration. In 1960, the Central Committee of the Communist Party and the State Council decided to simplify the celebrations. 

Then, in 1999, the Chinese government decided to extend the National Day celebration period in an effort to reinforce the economy by elevating the domestic tourism market. The government also sought to support the national standard of living. From that point on, the National Day holiday period was extended to seven days and became referred to in China as a “Golden Week,” similar to Japan’s Golden Week holiday.  

Advancing Political Agendas

For Xi Jinping, National Day is an annual opportunity to shape his national and international image and to push his political agenda, especially regarding China’s reunification. This year, Xi Jinping attended a Martyrs’ Day event on Tiananmen Square, presenting flowers at a memorial. He also urged the nation to “work together in unity” at a dinner reception ahead of October 1st, during a speech more usually delivered by China’s premier. In previous years, Beijing has also used the holiday as an opportunity to exert its political will and display its technological and military prowess internationally. In 2021, China marked national day by flying planes over Taiwanese airspace.

Over the past few years, National Day has also served as an annual opportunity for international protest against the Communist Party. This year, Uyghur and democracy activists from Hong Kong and other Chinese territories rallied in cities globally to protest on National Day as a “day of mourning.” Hong Kong has witnessed similar events unfold on National Day in 2019, 2020, and 2021. 

Fueling the Economy

National Day Golden Week was originally created to reinforce China’s economy, and the same holds true today. Many hope that this year’s Golden Week will generate momentum for and underpin China’s economy, which has faced headwinds in the property and manufacturing sectors of late. There is also the expectation that Golden Week will be a boon to Chinese consumption as people engage in extended travel and increased spending on luxury goods and services throughout the holiday period.  

Implications of National Day Golden Week

1. U.S. Policy Implications

In light of the cultural, political, and economic significance of National Day Golden Week, the annual holiday suggests certain foreign policy implications and opportunities for the United States. The U.S. Department of State could strategically utilize Golden Week’s timing to direct the U.S.-China relationship. For instance, during National Day Golden Week the Department of State could consider preparing an agenda for the annual COP conference focused on China. This would enable more streamlined discussions and the attainment of actionable climate resolutions throughout the summit. The State Department could also work more closely with its ASEAN partners and Quad counterparts during the week, explicitly organizing forums to bolster the U.S.’s positioning in the region. Economic engagement with allies in the Indo-Pacific during this time would also reinforce U.S. positioning in Asia.

Moreover, North American nations could consider adjusting the U.S.-Mexico-Canada Agreement (USMCA, previously NAFTA). Specifically, USMCA could include provisions for participating governments to allocate stipends and provide other incentives to North American businesses in an effort to boost regional productivity. Such incentives could be explicitly time-bound to take effect in the last three months of the calendar year, beginning at the same time as National Day holiday on October 1st and lasting through the end of the calendar year.

While the U.S. could consider leveraging National Day Golden Week to promote the rule of law and international order – corroborating the same message as National Day protesters in a peaceful and organized manner – it would be more appropriate to use recognized international structures and avenues to promote this message. Ultimately, the U.S. and China will have to work together on global challenges, such as climate change and global economic security, that would be insurmountable in the absence of their collaboration. The U.S. could therefore consider shoring up ties with the PRC during National Day Golden Week through shared commemoration of U.S.-China’s diplomatic history and other forms of cultural and political exchange. 

2. U.S. Business Implications

National Day Golden Week could be a profitable opportunity for U.S. businesses to break into the Chinese market. Indeed, since National Day celebrates the China’s foundation, U.S. businesses interested in breaking into China could specifically leverage National Day as a marketing strategy to establish presence in China, mirroring the establishment of the PRC. The celebrations throughout Golden Week could also present lucrative opportunities to introduce new products to the Chinese market.

Businesses with a presence in China could institute “golden discounts” for Chinese consumers on products and service offerings on National Day and throughout Golden Week. They could also make other Golden Week perks available (e.g., limited-time or seasonal products and services, sneak-peeks at upcoming product offerings).

U.S. businesses with operations in China may encounter more competitive behavior from Chinese companies during the celebration week. It may therefore be necessary to incorporate a National Day Golden Week strategy into business planning depending on the sector (e.g., consumer packaged goods) and product mix (e.g., luxury goods). 

3. U.S. Consumer Implications

National Day Golden Week is a perfect opportunity for U.S. consumers to travel to and learn more about China and its foundation. The cultural activities organized throughout the week are great opportunities to learn about the global significance of this PRC holiday. 

Furthermore, U.S. consumers traveling in China during Golden Week will find excellent discounts, especially in big cities such as Shanghai, Beijing, Chengdu, Chongqing and Shenzhen. They will also find niche tourism destinations and exotic getaway vacation spots, including in Tibet and Guangdong.

Finally, Golden Week can influence the performance of Chinese stock markets, cryptocurrency markets, and other regional asset markets. It could also impact global markets under the right circumstances. It could therefore be important for individual investors to closely monitor the behavior of Chinese-based assets.