China reopening may add 1% to Australia economy: JPMorgan

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China’s zero-Covid policy may add nearly 1% point to Australia’s economic output over the next two years, CNBC reported on January 10th, citing a note from the Chief Investment Strategist of JPMorgan Chase & Co, Tom Kennedy.

“China’s shift toward an earlier reopening raises the question of potential implications for the Australian economy,” Kennedy said.

“The largest potential upside from reopening itself sits within the services sector given China is the largest consumer of Australian tourism and education exports,” Kennedy wrote, noting that benefits from further changes to Beijing’s industrial policy would be an exception.

Since China is the leading consumer of Australian tourism and education, a recovery of Chinese tourist and student arrivals to pre-pandemic levels could comfort concerns over Australia’s economy and inflation in particular.

China announced the opening of its borders to international travelers for the first time since the outbreak of the coronavirus on January 8th.