The reopening of China’s borders is set to allow the return of its high-spending tourists back to the UK, helping to reduce the size of its recession in 2023.
(Bloomberg) — The reopening of China’s borders is set to allow the return of its high-spending tourists back to the UK, helping to reduce the size of its recession in 2023.
Forecasters at Credit Suisse expect Xi Jinping’s reversal of strict zero-Covid constraints will help drive a recovery in UK goods exports to China and draw in tourists that plow money into high-end shopping.
The Swiss bank said Chinese tourists and stronger UK exports can add a combined 0.2 percentage points to GDP growth in 2023. It anticipates a 0.8% contraction in the UK economy this year, an upgrade from its previous prediction of a 1.3% drop in gross domestic product.
High-spending Chinese tourists were becoming an increasingly important market for many high-end retailers in the UK before the pandemic brought a sudden halt to international travel. The Association of International Retail said that Chinese tourists were 5% of non-EU visitors to the UK in 2019 but accounted for just under a third of all tax-free shopping.
“As expected there has been a notable drop in Chinese tourists into the UK over the last three years,” said Sonali Punhani, head of UK economics at Credit Suisse. “If Chinese tourism spend recovered to pre-pandemic 2019 levels, it could potentially add 8 basis points to UK growth.”
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