“China forever” international student and tourism boom turns bust

By Leith van Onselen

The sudden sharp decline in Chinese tourists and international students has caught Australian authorities off-guard, raising painful memories of when booming Japanese arrivals slowed suddenly in the late-1980s. From The AFR:

…the narrative that the boom is going to last forever is no longer accurate. China’s economy is slowing and its middle-class consumers are becoming increasingly cautious when it comes to spending.

Many are rethinking expensive family holidays to long-haul destinations… Fewer are visiting Australia to buy property…

Beijing’s decision last week to issue a travel warning to travellers visiting the United States shows it will not hesitate to use its tourists and students against countries it falls out with politically. There is no sign that is happening with Australia yet, although some travel operators in China say negative media reports about the bilateral relationship are putting some of their customers off…

But investors who point to the huge contribution tourism makes to the Australian economy believe the slowdown has taken authorities by surprise and conflicts with earlier assumptions the boom would last a lot longer. As with the Japanese, there is no guarantee they will keep coming forever. This also applies to Australian universities’ reliance on Chinese students.

The below chart tells the tale. After more than doubling over the past five years, Chinese visitor arrivals have declined for 10 consecutive months, down 7% over that period and the lowest figure recorded since April 2017:

As we noted earlier this week, there are several possible explanations of why Chinese tourist and student arrivals are falling.

First, political tensions between Australia and China are rising, which may be reducing the flow of both Chinese tourists and students.

Second, China is increasing investment in its own universities and lifting standards, which comes at the same time as Australian university standards have plummeted.

Third, other nations are competing strongly for the lucrative Chinese dollar, and this increased competition could be limiting both tourism and student inflows into Australia.

Fourth, China may be making moves internally to limit the outflow of people and capital in order to protect the value of the yuan.

Either way, Chinese arrivals look to have passed their peak, meaning Australian tourism operators and universities will need to find a new cash cow to milk.

[email protected]

Comments

  1. Lolol lolol hahaha haha ha!!! Oh dear my sides hurt so much…

    Only the dumbest of dumb dumb dumb dumb dumb (insert expletive) here base their business on sustained Chinese patronage.

    I seem to vaguely remember another boom based on the Chinese that was GUNNA LAST FOREVER

    What was that? My memory is rather challenged these days keeping track of all the things I’ve been told was dead set cert but never eventuated.

    Have we learnt our lesson yet Straya?

    • Nah, Straya will never learn – you can count on that. But don’t worry, nor will other peoples. I mean, just look at all these bubbles in history that might have looked like destined to last forever until, of course, they didn’t.

  2. Is a fifth factor possible – that the Chinese economy is in more trouble than anyone is letting on and the money just isn’t there?

    • matthewMEMBER

      Yes absolutely amazed that this is not one of the options.Could it be that if you just follow numbers you miss things.As I have said before I am sure there is an art and a science to economics(being a non economist).The science is based on numbers and past experience.The art related to sensing the emotion on the street.Could it be that MB has missed the art in both Australia and China

    • nexus789MEMBER

      China has still managed to post a large trade surplus. More interestingly is that they own all their debt. Unlike dumb Australia which is massively exposed to the degeneracy of the international bankers that own our mentally challenged politicians.

      • China has significant offshore USD debt now. It doesn’t own all its debt anymore.

    • kiwikarynMEMBER

      – Chinese consumers are struggling under a mountain of housing debt, just like western consumers.
      – Unemployment is rising as jobs move out of the country due to Trump tariffs, and new ones are not materialising due to Trump tariffs
      – If you cant pay your bills in China you get a bad “social credit rating”. A bad rating automatically means you cannot leave the country as the ability to travel is tied to your rating (presumably to stop people fleeing overseas leaving behind their debts).
      – People go to jail now for illegally moving more than their allocated $50k per year offshore.

  3. I bet they will keep coming if holidaying here becomes cheaper than holidaying in China. 1 AUD = 0.01 USD might do.

  4. Phillip McCracken

    Would anyone like to see a graph of the Iron Ore price – that was going to go on “forever” as well.

    I think the Victorian Gold Rush is about to finish according to expectations at the time as well.

  5. China has always and is still using the tourist number tap as a political whipping tool for countries it may or may not be happy with (Korea, Malaysia, Pacific Islands, US, etc.). It is constantly doing so …

    And at the moment China is not happy with Australia – we need to live without the Chinese.

    • nexus789MEMBER

      Going to be real poor if you want to rely on the collapsing US economy rather than participating in the emerging Eurasian block.

  6. – Reason #6: The collapse of the “peer-to-peer” lending system. Chinese investors seem to have lost millions, if not billions.

  7. China won’t stop their Hukou* outflow into Australia.

    They still have 90,000,000 – yes 90 million Chinese Hukou* internal illegals to either move to the ‘ghost cities’ or increasingly send overseas as migrant guestworkers. In their 2020 five year plan.

    *Chinese Hukou – 2nd & 3rd generation peasants that moved to the tier 1 cities in china’s industrialisation. Lowlife peasants, petty criminals, failed social credit score, vice Workers, broken down old & sick, socially undesirable. Denied a tier 1 city pass, limits in health care, education, not able to register to live permanently in the Chinese tier 1 cities.

    https://www.cultivateleadership.org/blog-1/2018/2/15/chinas-middle-class-is-pulling-up-the-ladder-behind-itself

    “Roughly one-fifth of China’s population, some 250 to 300 million people, have irregular hukou status. The reform of the hukou system is a major plank of the Five Year Plan from 2016 to 2020. Under the reforms, 100 million internal migrant illegals are to have their hukou status ‘regularized’ by 2020. The first-tier cities opted to regularize their populations by expelling hukou applicants. Second-tier cities like Chengdu grant hukou status only if they have a masters degree. Third-tier cities will take them if they buy local real estate. But the Hukuo are poor & uneducated with no access to higher education”.

    The Chinese communist government in conjunction with the Chinese criminal syndicates have collaborated over the last decade to export & traffic this Chinese social welfare & economic burden overseas.

    Over 9 million Hukou poor, lowlife, criminals and failed social credit score have been exported so far as ‘China 🇨🇳 First’ colonisation of foreign countries in exploiting the borders and visa systems of foreign countries.

    The West, South Asia, Africa etc.

    To enter Australia as ‘Foreign students & partners, business & sponsored visas, or increasingly as ‘visitors in long stay & repeat stay.

    Australia now has 1.38 million mainland born communists Chinese onshore.

    The vast majority – especially the last decade have been this peasant and criminal Hukuo underclass.

    🇨🇳235,000 mainland born Communist Chinese – mostly the earlier wave of export and colonisation, from China or via other countries.

    🇨🇳426,000 PR on Chinese passports – mainland born communist.

    🇨🇳367,000 TR mainland born Chinese communists on pretext foreign student, partner, skilled & other visas.

    🇨🇳135,000 mainland born Chinese communists on the NZ SCV loophole

    🇨🇳220,000 mainland born Chinese communists on long stay & repeat stay visitor visas – many working illegally.

    Total 1.38 million 🇨🇳Chinese communist hukou🇨🇳

    1.25 million or a 90% concentration or Sydney & Melbourne.

    🔹Sydney 750,000 Chinese mainland born communists in vast Chinese only ghettos.

    🔹Melbourne 575,000 Chinese mainland born communists in vast Chinese only ghettos.

    And the other Chinese mainland born communists in similar ghettos in the other capital cities.

    China has 3 major rebellions underway, a debt laden crashing economy, trouble in Hong Kong (on a simple criminal repatriation treaty showing just how corrupt and criminal these ex colonies are in resisting Chinese control).

    A criminal repatriation treaty that Australia and China should sign as well as a ‘sharing proceeds of crime’ in xfer back to China of the $80 billion or more looted out and used by the Chinese criminal syndicates…
    In money laundering into established Australia property as cash in hand migrant only bunk share, in vice, drug and people trafficking.

    Net.
    Expect even more Chinese Hukuo.
    Less with dirty money as China puts money controls in place.

    There are still over 90 million Chinese Hukuo to be dumped somewhere.

    To flee China and the forced resettlement to the ghost cities – and to come & live and work in Australia illegally.

    $2k in China now buys an Australian PR.
    And the Chinese government bends all the rules and a blind eye to the people traffickers to assist in export of the Hukuo underclass.

    ➡️ The Chinese government and their criminal syndicates will still target Australia as an easy place to dump their criminals, aged, sick & social burden.

    That will be the trend.

    Nothing will change until Australia starts to enforce border & visa controls to prevent Australia from being swamped by this Chinese underclass being dumped here.