The start of the Chinese travel ban has triggered a massive drop on the New Zealand sharemarket today.
Around $2.5 billion has been wiped from the NZX 50, and the country’s tourism and trade sectors are also bracing themselves for a hit.
Tourism New Zealand CEO Stephen England-Hall said the financial fallout from the coronavirus could cost the New Zealand economy tens of millions of dollars every week.
“This ban, once it's fully in place and fully effective, you're talking in the order of magnitude of sort of $50- to $75 million a week of economic impact, and that's just for tourism,” Mr England-Hall said.
Around 400,000 Chinese visitors come to New Zealand every year, injecting billions of dollars into the economy.
“Chinese tourism in New Zealand is worth about $1.7 billion a year - that's how much they spend in New Zealand. In comparison, that's about the same size as our total wine export industry,” Mr England-Hall said.
KJet Queenstown’s Shaun Kelly, who has been in the tourism sector for decades, says operators have to be prepared.
“We've gone through several like the SARS epidemic, the swine flu, the GFC as well, ebola, so it's not new,” Mr Kelly said.
Some operators in Queenstown are already seeing cancellations.
New Zealand's travel advice is now at its highest level, with people warned not to go to China. (Source: Other)
However, planning ahead is difficult, Queenstown Chamber of Commerce’s Anna Mickell said.
“We don't know how big that disruption is going to be because we don't know how long this is going to last for, whether that's going to be weeks or months,” Ms Mickell said.
Charles Finny, a trade expert with two decades’ worth of experience in government and diplomatic roles, says any New Zealand businesses with dealings in China should be on alert.
“Every boardroom in New Zealand that is involved with the China trade should be thinking about the risks associated with the China trade right now,” Mr Finny said.
While dairy giant Fonterra said New Zealand farmers should not be concerned, there are economic warnings coming from China, with the ambassador to New Zealand today predicting trade, international education and tourism will all take hits.
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