Asia-Pacific—Tourism rebound limited by China’s mobility restrictions
World Risk Developments
The reopening of Australia’s international borders to all vaccinated persons has supported a strong rise in international travel; monthly overseas arrivals are estimated to have lifted more than fivefold since November 2021, to 377,000 in March. Still, despite the recent boost, arrivals remain around a fifth of the pre-COVID-19 average. Treasury expects it to take several years for international education and tourism to return to pre-pandemic levels. The near-term outlook will be constrained by consumers’ hesitancy, COVID-19-related health risks, and the slow reopening of China’s international borders.
Similarly, many Asian countries—including South Korea, Singapore, Malaysia, Thailand and Vietnam—are now welcoming vaccinated international visitors. Hong Kong has also lifted flight bans and reduced quarantine requirements. But according to the International Air Transport Association, the likelihood of renewed domestic restrictions during COVID-19 outbreaks mean that traffic to/from/and within Asia Pacific is expected to reach only 68% of 2019 levels in 2022, the weakest outcome among regions; for example, Africa will reach 76% of 2019 levels in 2022. Recovery to 2019 levels is expected in 2025, a year behind the global average.
China’s COVID-19 lockdowns are a limiting factor. China’s rolling COVID-19 restrictions are taking a heavy toll on the economy and mobility. There is no indication that the Chinese government is prepared to loosen its zero-COVID-19 approach at this stage. Strict lockdowns in economic hubs like Shanghai reflect the degree to which the Chinese government is willing to endure economic pain to maintain its COVID-19-zero policy. While China’s overall vaccination rate reportedly stands at 88%, only half of those aged over 80 are understood to be fully vaccinated. Further, certain vaccines are reported to have shown lower efficacy at preventing death among the elderly, unless three shots have been administered; fewer than 20% of over-80s have had three doses (Chart). Improving vaccination rates among China’s 27 million residents aged over 80 will be key to reopening China’s international borders and improving Asia Pacific tourism exports.