Just when China is being warned not to give Vladimir Putin support, with the US telling us that we might have to impose sanctions on Beijing if they buddy up to Russia and help them win the war, we’ve got our Tourism Australia boss, Phillipa Harrison, heading north to woo back Chinese travellers.

These important contributors to our tourism exports and economic growth have gone missing since the pandemic and the recent cold trade war between our two countries.

Tourism is our fourth most important export. Before the pandemic, tourism contributed about $62 billion a year to GDP, but over 2020-21 was only $35.1 billion.

Significantly, today we get to see the latest economic growth number for our economy. If it’s too big, it will be bad for interest rate worriers because it will imply inflation is remaining high. And more to the point, another important statistic will be the monthly Consumer Price Index, which will get to the heart of the interest rate matter.

Once again, a bad number will mean the RBA will keep ‘sticking it’ to borrowers to beat down inflation via putting the squeeze on those with loans. There is a valid concern that too many interest rate rises on top of those borrowers who go from fixed to variable home loans in the middle of this year, could send us into a recession.

As we learnt yesterday, Westpac’s chief economist thinks seven interest rate cuts will be needed across 2024 and 2025 to help the economy recover, so would the return of the 1.4 million Chinese tourists who used to come here each year. Their arrivals not only helped hotels and the hospitality sector, they also used to raid the likes of pharmacies and load up their bags with baby formula, which sent A2Milk’s share price through the roof. The pandemic and the loss of these unusual shoppers who flogged baby formula when they went home, are sorely missed by the company.

The Australian’s Robyn Ironside tells us that: “Expenditure of close to $5,000 a trip per person, meant Chinese tourists accounted for a third of all (tourism) spend, making their return critical to rebuilding the visitor economy.”

These travellers were worth $12 billion a year to our economy!

So how bad is the collapse of Chinese tourists?

“Currently the number of airline seats available between China and Australia is at just 23 per cent of pre-Covid-19 capacity when 158 flights a week were operating,” Ironside reports. “By June, capacity is expected to be at 36 per cent of 2019 levels before rising to 80 per cent by year’s end.”

This comes as Tourism Australia runs with a new campaign: “Don’t Go Small, Go Australia”, which features the likes of the Great Barrier Reef and Great Ocean Road, and so on. And helping the sales effort will be Ruby the Roo, which Tourism Australia hopes the Chinese population will fall in love with.

Happily, The Australian says that “research by the Australian Trade and Investment Commission showed China’s growing middle class aspired to restart their travel activity, with Australia seen as a relatively short-haul destination with a good reputation, particularly among international students.”

It’s an important job for the economy but I don’t think Beijing’s battles with the US and then its allies, like us, is going to make Phillipa’s job easy.

If 2024 brings interest rate cuts and over a million Chinese tourists, it will do a lot to offset the damage from the RBA’s assault on inflation via what could be an excessive load of interest rate rises.