China’s Reopening Brings Growth to Australia: ANZ Bank Report
According to the Australia & New Zealand Banking Group, the reopening of China is predicted to enhance Australia’s GDP by 0.4% in the next two years. The growth will be fueled by an increase in Chinese students and tourists, as well as heightened exports of natural gas.
The return of at least 50,000 Chinese students to Australia for the beginning of the academic semester this month is expected to alleviate the country’s tight job market. These students will require housing, food, and other basic necessities, accounting for 57% of education exports.
The increase in service exports to China, Australia’s top trading partner, will bring much-needed growth in the midst of high-interest rates. This could aid the central bank in managing inflation while achieving a soft landing.
ANZ Bank expects a rapid return of Chinese visitors, though full recovery may take a few years due to the high cost of travel and passport and visa processing delays. Additionally, China’s strengthened industrial activity will increase demand for liquefied natural gas exports, but the impact on iron ore exports will be limited due to the current property downturn.