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China prepares to learn to “live with the virus” and foreigners are welcomed back

After almost three years of some of the strictest anti COVID-19 measures in the world, China opened its borders last month and lifted most of its pandemic rules, putting an end to its zero-COVID policies. As the country prepares to learn to “live with the virus,” international travellers are welcomed back into the country, while the business community looks forward to resuming activities.

However, the sudden lifting of preventive measures was questioned by the international community. Many countries rushed to impose testing on travellers arriving from China, as well as mask mandates.

Last January 8, the Chinese government eliminated all quarantine requirements for travellers and lifted the measures to control the number of international passenger flights, including the “five-one” policy (in which every foreign airline was required to maintain only one air route to China and operate no more than one flight a week) and the passenger load factor limit.

The government also announced that it will further optimize arrangements for foreigners returning to China for work resumption, business, study, family visits, and reunions, and provide visa facilities accordingly.

Eliminating the quarantine requirement is a major step toward fully reopening travel with the rest of the world. Additionally, inbound travellers are no longer required to take COVID tests regularly; infections can be handled at home rather than through isolation-based therapy and surveillance; close contact or secondary close contact will not be subject to any quarantine; and the inbound travellers’ location data will no longer be traced.

The business community welcomed the announcement, after almost three years of struggling because of strict lockdowns and travel restrictions.

With China resuming normal visas policy, foreign professionals can travel again to the country. Foreign investors and overseas head offices who struggled managing and administering their China subsidiaries, can now resume relationships with their Chinese managers and employees.

Foreign companies interested in having a presence in China are able now to evaluate the market situation more closely and start making concrete plans to expand their business.

However, foreign nationals traveling to China should continue exercising caution and taking preventive steps to protect their health. They should also double check the latest policies on departure and arrival depending on their city of origin and destination.

According to the China Tourism Academy, China’s tourism will fully recover by summer of 2023, with travel volume expected to approach and even exceed pre-pandemic levels.

The estimates follow the strong numbers recorded during the 2023 Chinese New Year period, which saw the highest travel volume since 2020. According to the academy, over the course of 2023, domestic tourism is expected to recover to 76 percent of the level in 2019, with an estimated total of 4.45 billion trips.

International tourism, meanwhile, is expected to recover to 31.5 percent of pre-pandemic levels, with around 90 million inbound and outbound trips, a two-fold increase from the previous year.

On Thursday, February 16, the 27 EU member countries and Schengen agreed to phase out testing requirements imposed on travellers from China following the lifting of COVID-19 restrictions. Member states, based on the recommendation of health experts, agreed to phase out the requirement for a negative pre-departure COVID-19 test by the end of February and to phase out random spot testing of travellers arriving from China by mid-March.

The travel measures were provided as optional guidelines for EU members to adopt, with countries such as France, Italy, Spain, Sweden, and the Netherlands, choosing to do so.

Elsewhere, Australia, Canada, India, Israel, Malaysia, Morocco, Qatar, South Korea, Taiwan, and the USA have introduced additional COVID measures for arrivals from China.

Beijing recently issued a statement saying that China has provided medical care to 200 million people who were infected with COVID-19 since November 2022. This number also includes almost 800,000 patients who were in critical condition.

According to a paper by Chinese scientist George Gao, no new variants have emerged in the initial weeks of China’s recent outbreak. This is in line with China’s CDC’s statement that their continuous monitoring showed no new strains of COVID-19. “The world should completely calm down from the fear that there are new variants or special variants circulating (in China)”, Gao said.

A second wave of COVID-19 infections is “unlikely” in the next two-three months, according to Chinese government officials since 80 percent of the population already caught the virus and built immune resistance to it. Wu Zunyou, the chief epidemiologist at the China CDC, stated that a second COVID-19 wave is unlikely to happen soon, despite the widespread movement of people during the ongoing Lunar New Year holiday period.

According to Zhang Wenhong, a Shanghai-based expert in infectious diseases, once COVID-19 becomes endemic, China will soon be on par with the rest of the globe. “The pandemic’s initial wave of the peak has also reached Mainland China. We will move into an endemic stage as more medical resources become accessible,” he said in a recent seminar.

In view of the faster-than-expected recovery of consumption and other activities, rating agency Fitch has revised its growth forecast for China to 5.0% from 4.1%. It is the first major rating agency that upgrades China’s 2023 economic growth forecast.

With China reopening and overseas group tours resuming, both Chinese and foreign airlines are increasing their number of international flights. China’s Taiwan Affairs Office said that the Chinese mainland is ready to resume all cross-strait direct flights without restrictions and urged Taiwan to do the same.

On February 6, travel agencies and online travel companies restarted their inbound and outbound group tours and “air ticket + hotel” business between the Chinese Mainland, and Hong Kong and Macao. On the same date, mainland China fully opened border crossings to and from Hong Kong and Macao and lifted caps on the number of travellers permitted to cross.

It also removed requirements for travellers to have a negative COVID-19 test if they have been in Hong Kong and Macao for seven days prior to crossing.

After the authorities and official media declared the COVID-19 outbreak under control and about to approach its peak, thousands of people came to the streets to celebrate the New Year.

As China shifts to a “living with COVID” strategy, businesses and investors are anticipating manufacturing and supply chain disruptions as a result of a spike in cases. With a peak predicted over the winter months, businesses should, to the best of their ability, prepare for the impending disruption and formulate risk mitigation plans until the end of 2023.

Global investment banks are optimistic about China’s economic outlook, despite business confidence hitting a decade low. A survey by World Economics showed that China’s business confidence fell to 48.1 in December from 51.8 in November, reaching the lowest since 2013.

On the other hand, global investment banks are bullish about China’s economic performance, predicting growth of five percent or higher in 2023. China’s economy will start to improve after March, once the wave of COVID-19 cases slows down.

To learn more about our services in China, contact our Head of Business Advisory - Ms. Kristina Koehler-Coluccia at kristina@woodburnglobal.com.



DISCLAIMER: All information in this article is verified to the best of our ability and is assumed to be correct at time of release; however, Woodburn Accountants & Advisors does not accept responsibility for any losses arising from reliance on the information provided within. The information provided is for general guidance and does not replace specialized advice.

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