It seems that China is not planning on scaling its zero-covid policy down. If anything, the government officials are staying more loyal to it than ever. Whatever the implications are for the social well-being of its citizens, the economic consequences are adamantly negative. Specifically, the never-fully-recovered tourism and hospitality industry is bracing for a new blow as the normally popular Ching Ming Festival is approaching with one more reminder of huge volumes of potential profits lost.
The three-day tomb-sweeping festival takes place from Sunday to Tuesday, and reports by tourism agencies indicate that travelers prefer short-distance trips during this holiday – a trend that has risen to prominence rapidly as people avoid long-haul journeys due to the ever-changing travel restrictions and differential quarantine mandates.
However, according to Zhou Mingqi, founder of tourism consultancy Jingjian Consulting, tourism-related consumption can hardly be influenced significantly by day trips. Whereas long-distance journeys generally involve such collateral spending as transportation, lodging, food and beverage, and souvenirs, short excursions may result in marginal consumption in the form of attraction tickets only. Thus, the trend clearly undermines travel spending.
“Tourism is an industry supported by cross-regional movement and spending, and if there is no movement from province to province, from city to city, there is no market,” said Chen Xianghong, president of Wuzhen Tourism in Zhejiang province and of Gubei Water Town in Beijing.
Elsewhere, flight prices are also plummeting. April saw the costs of traveling to and from such popular destinations as Beijing and Guangzhou decrease rapidly, representing a steep decline in bookings and promising unsatisfactory prospects for airlines. Air China, China Eastern Airlines, and China Southern Airlines, the three behemoths of the country’s aviation industry, reported losses of over 10 billion yuan (US$1.57 billion), together with even larger losses in 2021 than the year before, according to their respective annual reports released last week.
One of the starkest symbols of the pandemic, Shanghai has once again found itself off guard ahead of its worst yet outbreak of Covid-19. Favoring radical measures, authorities implemented a rapid two-stage lockdown last Monday, effectively restricting residents’ movements to their neighborhoods and suspending all public transport.
As Shanghai and other cities remain closed to travelers and do not allow anyone outside either, central and local authorities go even further and advise people against traveling to areas with high disease prevalence. However, Zhou warns that the ramifications of the outbreaks will extend much further than just travel bans. “The blow to the economy equals a blow to consumption, and the desire to spend,” he said.
Overall, it seems like China keeps banking on its zero-covid policy as a panacea. However, how long can the economy survive under such circumstances? Given its size and relative robustness, the consequences are not yet as upsetting as in many other countries, however, no one, not even the great Asian giant, is immune to the shocks brought about by the economic slowdown.
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