After showing footage of the response to coronavirus, China's ambassador to New Zealand, Wu Xi, questioned why travel restrictions were still in place. Photo / Mark Mitchell
After showing footage of the response to coronavirus, China's ambassador to New Zealand, Wu Xi, questioned why travel restrictions were still in place. Photo / Mark Mitchell
When Chinese Ambassador Wu Xi questioned why travel restrictions on her country were still in place, she heaped pressure on the Government, but she was raising an issue which people in the capital are already contemplating.
We know this because the Reserve Bank effectively told us so.
The central bank predicted last week that while some parts of New Zealand would be hit hard, overall coronavirus would only create a relatively short hit to economic activity, knocking 0.3 percentage points off economic growth.
It did so based on the assumption - made in consultation with other parts of the Government - that travel restrictions will begin to be lifted well before the end of March.
Madam Wu's presentation appeared to be aimed to back the case for a swift return to normal, claiming that in comparison to other high-profile diseases - Sars, H1N1 and Ebola - China was "making a miracle".
The embassy showed footage of Chinese officials handing out supplies and ordering entire neighbourhoods to stay indoors.
It showed a busload of people waving enthusiastically while wearing face masks. Keep calm and coronavirus.
She said outside Wuhan province the number of new cases was very small, and in the epicentre new cases were trending lower.
Rather than simply being China's belief, the ambassador pointed to warnings by World Health Organisation officials, the travel bans could in fact hinder the response to the virus.
She hinted at possible damage to New Zealand's relationship with China.
Even if you accept her arguments, deciding when to allow regular travel to resume will be a dilemma.
It is impossible to believe the disease will be eradicated in China in the next few weeks, and in other countries it may be spreading.
That may create pressure for more restrictions.
According to reports, Israel yesterday extended its travel restrictions to cover travellers from Hong Kong, Macau, Singapore and Thailand.
New Zealand is not making this decision in isolation. Had the Government not put the restrictions in place earlier this month, we faced the prospect of Australia closing its border to us.
Meanwhile, even if officials believe our healthcare system could handle cases of the virus, many Pacific countries could not possibly cope. The recent spread of measles to Samoa has created a sense that New Zealand must not contribute to another epidemic in our neighbourhood.
Health Minister David Clark. Photo / File
Health Minister David Clark said yesterday the restrictions would not be in place any longer than necessary, our economic interests were being considered, but "first and foremost we're looking after the health and safety of New Zealanders".
But keeping the current restrictions in place could also be damaging; the warnings about the impact on the economy are growing more serious, almost by the day.
On Monday, the Prime Minister conceded Treasury advice suggested the economy would grow more slowly than previously expected grow this year.
This was overshadowed by BNZ's warning a recession was now "plausible", while ANZ agreed the risk was certainly rising.
Every day, the thousands of Chinese students enrolled to study at New Zealand universities but unable to get here because of the travel ban are less and less likely to ever make it here.
As well as the immediate impact from a sharp loss in demand from key Chinese markets for some of New Zealand's major exports, economists expect second order impacts to other industries as imports are disrupted.
While it is not the travel restrictions themselves which are affecting most of New Zealand's economy, the longer the restrictions continue it is likely the longer it will take them to recover, or more likely that Chinese buyers will look elsewhere.
So the Government has to make a decision: at what point does the medicine do more damage than the disease?
When might we decide that the risk of allowing cases of coronavirus into New Zealand is less than the damage it does to the economy by trying to keep it out?
