JPMorgan Foresees Australian Economy Boost with China Recovery

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According to JPMorgan & Chase Co, the return of Chinese students and tourists may help boost the Australian economy by almost 1 per cent over the next two years, according to JPMorgan & Chase Co.

According to the bank’s chief investment strategist Tom Kennedy, “China’s shift toward an earlier reopening after Covid-zero raises the question of potential implications for the Australian economy. The largest potential upside from reopening itself sits within the services sector, given China is the largest consumer of Australian tourism and education exports.,” he added.

The greatest tourist and student market for Australia is China.The bank forecasts that Chinese students and tourists may return to 2019 levels, bringing an additional 0.4 and 0.5 per cent to GDP, respectively. Kennedy noted that they have already seen recovery and that a total return will be seen in 2024, spread out over numerous quarters.

In 2019, 15.3 per cent of Australia’s inbound tourism was from China, making it the largest source of short-term visits to the country. The latest data from the Australia Bureau of Statistics reported 430,470 short-term trips to Australia were made in October 2022. Visitors came from New Zealand, the UK and the US. Visits from China were still low at the time.

China’s lifting of its two-year ban on exporting Australian coal is fueling sentiment that other exports like wine, lobster and other commodities may follow soon. According to China’s Foreign Minister Wang Yi, “To maintain a sound and steady growth, our comprehensive strategic partnership serves the fundamental interests of our two peoples and is good for peace and development in the Asia Pacific and beyond.”

During the meeting in Beijing, reporters noted that Yi addressed the strained relationship between the two nations in the past years. He added, “This is what we do not want to see; the lessons must be learned.”

Australian stock and currency markets were boosted, almost achieving their highest market levels since mid-September. According to Kennedy, the most critical improvement in the renewed trade relations between Australia and China is the reduction of government-imposed bans and restrictions.

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