February 2023 Issue: From the Tiger, to the Rabbit

Interested in a roundtable discussion which will encompass conversations about recruiting, the job market and what it’s like for those about to leave University or those who have just left?

Young Associates have an exciting upcoming event for you, partnering with our parent organisation, the NZCTA!

There will be a number of organisations from the NZCTA network that will be in attendance, providing the opportunity to discuss and network, followed by drinks and nibbles afterwards.This exciting event will be happening on Tuesday 28th of March in Auckland CBD and is an exclusive event for our Patreons, so sign up here!

If you're curious how our Roundtable went last year - Read more about the Roundtable here where we engaged with companies such as PWC, MFAT, NZTE, Faceton, Alpha Group and United Media Solution to discuss the future of recruitment in NZ and China.

Keep your eyes peeled as we’ll be releasing more details shortly! Please follow us on Instagram and Facebook for more details soon!

With China easing its Zero COVID-19 policy in January, domestic and international travel is expected to rebound post Lunar New Years. Pent up demand from three years of restrictions has seen over 637 million Chinese citizens on the road, with travel bookings 3 percent higher than the 2019 holiday.

Most Chinese airline carriers and tourist operators have been able to retain their staff, making a rapid domestic recovery possible, as few operators left the industry during the pandemic. The opposite is reflected with international carriers, and the pilot shortage may hinder the rebound and road back to pre-COVID-19 levels. In 2019 China was the second biggest market by arrival to New Zealand, reported by Tourism NZ of 407,000 visitors. However, this year New Zealand is only anticipating 150,000 tourists from China. Whilst domestic tourism in China is expected to recover quickly, overseas travel may be slower to react.

On the 6th of February this year, China opened up to cross border travel with Hong Kong and Macau, further sparking a renewed optimism of a rebound to pre-pandemic travel. Hong Kong hoping for similar renewed optimism, recently launched a promotion campaign on the 5th of February including 500,000 free flights to lure back visitors, businesses and investors to the financial hub.

It will be an interesting space to watch over the next year, and a step-by-step recovery is expected. Analysts are predicting the summer season to drive tourism to 76 percent of 2019’s level. IHG Hotels & Resorts, one of the world’s leading hotel groups, announced an expansion plan in Greater China to leverage the forecasted recovery. Read more here.

The Year of the Tiger was a challenging year; China fell short of the 2022 growth target of 5.5%, recording a 3% growth in GDP, manufacturing was halted, supply chains were disrupted, and movement limited. This came as a result of a multitude of factors, including the COVID-19 restrictions, a dampened property market, low consumer confidence and the war in Ukraine.

Coming into the Year of the Rabbit, there is optimism for the road ahead. With Zero-COVID measures relaxed, and trade increasing slowly, the travel and hospitality areas are looking to rebound. There is a strong focus within China for economic recovery and restoring confidence and consumption. The Lunar New Year travel and January economic data was promising to analysts, and economists are forecasting GDP growth for China in 2023 5.2% (up from its 4.4% forecast October of last year). There is also an expectation of higher consumption, as a result of an incoming “urban push” from rural areas and “revenge spending”.

This optimism has been accompanied by the relaxation of various regulations in China, offering further optimism due to the support provided to troubled sectors. The first relaxation of regulation was the easing of tech measures:

1. The announcement of Ant Group’s Initial Public Offering (IPO) (Alibaba is owned by Ant Group), which was previously suspended.
2. The resumption of new registrations for Didi, a ridesharing platform, which was previously banned from doing so.

The second relaxation of regulation was the “Three Red Lines” policy. “Three red lines” was imposed in 2020, and limited liquidity for the most-leveraged developers, and aimed to reduce the level of financial risk in the property market. Now in 2023, it has reduced the level of debt and risk, but it has also resulted in limited liquidity for developers to complete projects. The relaxation of measures now means raised lending caps on developers, and a reduction in barriers that consumers face when applying for mortgages, leading to reduced pressure on the property market.

These changes, relaxations and growing consumer and investor confidence, are turning the prospect of Year of the Rabbit into a more optimistic one.

Read the MFAT report for more information, and a more in-depth look.

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