Forward Outlook

Economic and Political Outlook

The Economist reports that the main political priority for the Chinese government over the past year has been to ensure that the Beijing Olympic Games in August pass off smoothly.

Efforts to move economic growth on to a more socially and environmentally sustainable path, which are championed by President Hu Jintao, will guide government policy in 2008/09.

The Economist Intelligence Unit (EIU) reports that the government budget is forecast to remain in the black in 2008/09, following a surplus of 0.7 per cent of GDP in 2007. The EIU expects real GDP growth to moderate in 2008 and 2009, largely owing to the weaker outlook for net exports.

China 's current account surplus is expected to remain substantial during the forecast period, owing mostly to the huge trade surplus.

The Chinese government has recently announced an increase in fuel prices in response to rising global oil prices. Property prices, which have increased rapidly during the past two years, have started to fall in most big Chinese cities.

Tourism Outlook

China’s outbound travel market is flat after the Sichuan earthquake and the Olympic Games, but is expected to pick up again after September when government and business travel resumes.

Tourism New Zealand activity continues to focus on improving the quality of ADS group tours and developing the FIT market, including the luxury sector. The launch of Air New Zealand's direct flights to Beijing in July 2008 is set to boost this market further and will help promote New Zealand as a single holiday destination.

Current oil prices have seen many airlines reposition fuel-efficient aircraft and make changes to scheduled services. New Zealand has been affected with a reduction in scheduled services out of Beijing, Shanghai and Hong Kong effective over the September/October/November period.

Sources: Tourism New Zealand Regional Rap, www.economist.com (China Country Briefing)