Shrugging off those gloomy forecasts, investors are betting that China’s reopening will help revive the US$17 trillion economy and bolster the outlook for global growth.
Those hopes lifted Asian shares to a five-month high on Monday while China’s yuan firmed to its strongest level against the dollar since mid-August.
China’s blue-chip index gained 0.7 per cent, while the Shanghai Composite Index rose 0.5 per cent and Hong Kong’s Hang Seng Index climbed 1.6 per cent.
“The ending of the zero-COVID policy is … going to have a major positive impact on domestic spending,” Ralph Hamers, group chief executive officer at UBS, told the bank’s annual Greater China Conference on Monday.
“We believe there is a lot of opportunity for those committed to investing in China.”
HUGE RELIEF
“It’s a huge relief just to be able to go back to normal … just come back to China, get off the plane, get myself a taxi and just go home,” Michael Harrold, 61, a copy editor in Beijing told Reuters at Beijing Capital International Airport on Sunday after he arrived on a flight from Warsaw.
Harrold said he had been anticipating having to quarantine and do several rounds of testing on his return when he left for Europe for a Christmas break in early December.
State broadcaster CCTV reported on Sunday that direct flights from South Korea to China were close to sold out. The report quickly shot to the most read item on Chinese social media site Weibo.
However, a spike in demand from South Koreans, who make up the largest number of foreign residents in China, as well as others, will be hampered by the limited number of flights to and from China, which are currently at a small fraction of pre-COVID levels.
Korean Air said earlier this month that it was halting a plan to increase flights to China due to Seoul’s cautious stance towards Chinese travellers. South Korea like many other countries now requires travellers from China, Macau and Hong Kong to provide negative COVID-19 test results before departure.
Flight Master data showed that on Sunday, China had a total of 245 international flights, combining inbound and outbound, compared with 2,546 flights on the same day in 2019, representing a fall of 91 per cent.
China’s domestic tourism revenue in 2023 is expected to recover to 70 to 75 per cent of pre-COVID levels, but the number of inbound and outbound trips is forecast to recover to only 30 to 40 per cent of pre-COVID levels this year, China News reported on Sunday.
Source: CNA
