The return of Chinese tourists could boost Aussie economy by 0.5%, JPMorgan reports
Australia’s economy could be boosted by the return of Chinese tourists by 0.5 percentage points, per JPMorgan.
“China’s shift toward an earlier reopening raises the question of potential implications for the Australian economy,” Tom Kennedy, JPMorgan’s chief investment strategist, said.
“The largest potential upside from reopening itself sits within the services sector given China is the largest consumer of Australian tourism and education exports,” Kennedy wrote.
JPMorgan noted that a full recovery of the Aussie tourism industry, which is quite reliant on Chinese tourists, could add 0.5 percentage points to Australia’s GDP.
While the Aussie Government lifted its remaining COVID-related travel restrictions in July, the amount of short-term international arrivals is still almost half as much as pre-pandemic levels.
ABS data showed that 430,470 short-term trips were made to Australia in October 2022 — 44 per cent lower than levels seen in October 2019. Arrivals in 2022 came mainly from New Zealand, the U.K. and the U.S., whereas China accounted for 15.3 per cent of all of Australia’s inbound tourism in 2019.
JPMorgan revealed that the average tourist spend from a Chinese visitor was four times that of a Kiwi visitor, the second largest source of inbound tourists.
“Our expectation is for the tourism-related consumption impulse to be spread over 2023 and 2024,” Kennedy wrote.
“While the duration adjusted spending numbers are less striking, real GDP is an aggregate concept and so the absence of Chinese tourism has been a notable headwind,” he said.
Chinese airlines have reintroduced its Aussie routes over the coming months. China Airlines will begin Sydney-Beijing flights on 3 February three times a week and Melbourne-Beijing route will operate three times a week from 1 February.
Featured Image: (iStock/LeoPatrizi)
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Chinese tourism Chinese Tourists JPMorgan Tom KennedyLatest News
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