A new wave of tourism: Since 2005, Chinese short-term visitors to Australia have more than doubled, with China now the second largest inbound market (732K p.a.) by arrivals (after NZ). This has been driven by rising Chinese wealth, geographic proximity and a steadily rising currency. And with only 5% of Chinese having passports currently, demand for tourism should increase. Chinese visitors in 2012 spent A$4.2bn, with Tourism Australia forecasting this expenditure to grow to around $8.2bn by 2020.
Japanese tourists in the 80s: We compare the emerging China trend with the trajectory of Japanese tourists into Australia in the 80’s which drove the last great tourism boom in this country. Applying similar levels of growth rates, we could potentially see 1.6m Chinese tourists arriving annually by 2020.
Leverage to a “New China”. Australia is often only regarded for our resource links to the “old china” growth model. Service exports, such as Tourism (2.8% of GDP) and Education (1% of GDP) offer leverage to the “new” consumption-led growth model in China. And whilst growth in these sectors will not fully offset the near-term slowdown in resource-linked activity, we believe the economic multipliers should not be underestimated.
Well, that’s pretty awesome. Just so long as the dunderheads get the dollar down to stop the profits going straight back out again:
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.
