As China lifts its Covid curbs and the economy reopens, the largest likely beneficiaries will be Hong Kong, Thailand and Singapore as demand for imports and overseas travel heighten.

This is according to a new report published by Goldman Sachs Group. 

The findings show Hong Kong may see a forecast 7.6% rise in GDP as export and tourism income increase, whilst Thailand’s GDP could rise by 2.9% and 1.2% for Singapore. 

Goldman Sachs economists Hui Shan and Goohoon Kwon said that the estimates are founded on the assumption that China’s reopening will boost the country’s domestic demand by 5 percentage points, Bloomberg reports.

“China’s reopening is likely to have the most positive effect on international travel followed by stronger goods imports,” they said in a note on Sunday.

In addition, Hong Kong will see a probable hike to travel spending totalling 6% of its GDP, Goldman added. The increase may be stronger still should people in China have considerable “pent-up” demand for travel after the borders being closed for three years, the economists stated.

In addition, not including Hong Kong and Singapore, the boost to direct trade from China’s reopening will be minor for the majority of economies in Asia, increasing their GDPs by between 0.2 and 0.4 percentage points.

Furthermore, the rise in Chinese oil demand could increase global oil prices by as much as $15 per barrel, which would have a negative effect on economies such as Hong Kong and Singapore.

The Goldman Sachs economists said their assessment is based on the direct impact of China’s reopening on travel and trade, not taking into account possible supply chain issues, as has recently occurred in Shanghai and Zhengzhou.

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