China will not be driving post-pandemic recovery due to closed-door policy

China's outbound travellers – which were a rapidly growing sector – can not be depended on for post-pandemic recovery due to China's closed-door policy

Travel players looking to hedge their bets on China driving the post-pandemic recovery may have to watch the country’s economic, social and political trends more closely as the market “stays on the international travel sidelines”.

Peter Harbison, chairman emeritus, CAPA – Centre for Aviation, predicted “a lean 2022” and “a considerable shift in the way China behaves in future”.

China’s outbound travellers cannot be depended on for post-pandemic recovery due to China’s closed-door policy; domestic tourists at City God Temple of Shanghai pictured

Speaking at last week’s CAPA live on Travelling Again: Outlook for Asia as China stays on the sidelines of international travel, Harbison alluded to many countries in the region not being able to depend on China numbers, which have grown substantially over the last 20 years.

With no China outbound since the pandemic, he cited the creation of “substitute international operations and generous provisions to buy duty-free goods on Hainan island” meeting holiday and business travel demand.

Harbison believes China’s “total protection from Covid-19” stance would retain and the government would adopt a “very different policy from most of the other countries in terms of being ultra-conservative and opening up”.

He also flagged China’s birth rate, which declined to 1.3 per household in the last two years, resulting in 750 million fewer Chinese by 2065.

Harbison continued: “If, and the trend suggests this, it falls to one (per household), and that’s not out of the question, the population will reduce by that amount by 2050.

“Even by 2030, we’re going to start to see a significant decline in working-age citizens as the population ages. And that has a considerable impact on international travel numbers,” he added.

As for China’s aviation industry, Harbison said past policies stimulated low-yield international outbound growth but “couldn’t really attract much in terms of inbound, which tended to have a higher profile higher premium travellers including business travellers”.

Given the airlines’ losses, which he described as “pretty steep”, the financial considerations of the major players, which have been heavily subsidised, is perhaps something that is going to influence Chinese policy.

Sponsored Post