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ESG Impact Events

Months of headlines have featured GOP politicians criticizing investment firms including BlackRock for offering funds that focus on environmental, social and governance (ESG) issues.
In a bad year for stocks, investors added less to sustainable funds, but will end the year close to flat in asset flows.
ESG fund returns were down, but only slightly more than the broad stock market.

Rawpixel | iStock | Getty Images

You could be excused for thinking, after months of headlines about “woke capitalism” and big stock market declines, that socially-conscious investing was on the run, dogged by hostility from politicians who think that focusing on corporate governance and environmental impact means burning retirees’ money to push an agenda other than bottom line return on investment.
But you would be incorrect.

In fact, so-called sustainable funds, also known as ESG funds (for environmental, social and governance) were still seeing net inflows from investors through the end of November, the last month for which complete data is available, and are likely to end the year close to flat or slightly down, according to data compiled for CNBC by Morningstar. The three months previous to December all saw negative flows, and most of the money came in during the first half of the year, but sustainable funds assets still grew amid the market rout by 0.84% through November, better than the 1.1% decline for all funds, according to Morningstar.
The market’s struggles in December will likely erase that small gain in net flows by year-end, but the lack of a stampede out of ESG funds belies the negative narrative that has sprung up around ESG investing, said Alyssa Stankiewicz, Morningstar’s associate director of sustainable fund research. “Anti-ESG has gotten a lot of attention, and it isn’t necessarily reflected in the data,” Stankiewicz said. “ESG didn’t have that rough of a year at all.”

Net fund flows in 2022

Month
ESG fund flows ($B)
All fund flows ($B)

2022-01
3,344,004,059
8,082,218,819

2022-02
2,787,079,780
48,382,704,586

2022-03
3,822,291,292
30,217,917,333

2022-04
1,260,561,808
-93,741,946,720

2022-05
-3,308,599,001
-41,709,431,331

2022-06
379,764,023
-64,284,718,723

2022-07
-18,096,791
-14,722,833,775

2022-08
953,818,579
3,220,188,916

2022-09
-659,133,391
-76,876,988,291

2022-10
-3,670,207,057
-29,987,131,270

2022-11
-2,054,672,735
-52,588,338,693

Year-to-date through November
2,836,810,566
-284,008,359,149

Growth rate
0.80%
-1.01%

Source: Morningstar

More important to investors than flows, the performance of ESG funds has not been good, but hasn’t deviated significantly from a tough year for the market. Analysts who follow the industry say ESG funds’ performance has been held back, most clearly, by the fact that many sustainable or ESG funds avoid companies that make fossil fuels. Energy, dominated by traditional players like ExxonMobil and Chevron, is the only one of 11 sectors in the Standard & Poor’s 500 stock index to rise this year. 
The average large-cap stock ESG fund had lost nearly 20% in 2022 through Dec. 21, according to Morningstar. That’s about 2.4 percentage points worse than the drop in the S&P 500 Index, including dividends. S&P Dow Jones Indices says its S&P 500 ESG Index is down 18.5%, also including dividends.
“Depending on how you slice it, ESG has done OK,” said David Nadig, an exchange-traded fund expert and financial futurist at VettaFi, a research firm for financial advisers. Within ESG, some clean energy ETFs have had much smaller losses than the broader market, with the iShares Global Clean Energy ETF down about 5%. “It’s not that ESG isn’t working. It’s a down market,” Nadig said.

Energy will loom large in ESG again in 2023
Whether the lag in ESG performance continues depends, crucially, on whether oil continues to outperform, since the absence of oil from most ESG funds hurt 2022 results. Morningstar energy strategist Stephen Ellis thinks that’s unlikely, since “we see the stocks as fairly valued to expensive,” particularly in the oil part of the petroleum business. Meanwhile, Fidelity Investments’ portfolio manager Maurice Fitzmaurice wrote on Dec. 14 that oil and gas demand should keep growing as effects of the Covid pandemic pass, while lost supplies from Russia prod oil prices to rise. 
Funds that eschew ESG have turned in mixed performances, with energy the big difference maker. The Constrained Capital Orphan ETF, which concentrates on ESG-disfavored fossil fuel, weapons, gambling, tobacco, alcohol and nuclear energy companies, is up 6% for the year. But the B.A.D. ETF – which emphasizes gambling and alcohol along with pharmaceuticals, without major holdings in oil and gas – is down 18%. 
ESG fund flows in Europe have held up much better than in the U.S, which Morningstar’s Stankiewicz says is because of more pro-ESG regulations. 

U.S. regulation is moving, at the federal level, in a pro-ESG direction, but not going as far as Brussels, Stankiewicz said. A new Labor Department rule announced last month reverses a Trump administration policy and allows administrators of 401(k) plans to consider ESG factors, along with shorter-term financial considerations, in selecting investment options for members. 
Also, the Securities and Exchange Commission is considering a rule that will require detailed disclosures from public companies about their climate impact, including their own carbon emissions, emissions from utilities who sell the companies heat and electricity, and emissions by customers who use a company’s products.
But there also was increased scrutiny of “greenwashing” in the fund industry by the SEC, with its new Climate and ESG Task Force within the Division of Enforcement investigating ESG-related misconduct.
All the attention, positive and negative, are likely to keep ESG investing on investors’ minds, even as it remains a tiny share of the overall market, Nadig said. Its larger impact will come as the SEC rule lets investors make more accurate comparisons of companies’ strategies to control their own exposure to climate risk and other governance issues that can affect financial performance, he said.
“Even if you’re not an ESG investor now, you’re moving to a world where every company and portfolio has an ESG score, just like a price-to-earnings ratio,” Nadig said. “It’s another metric you can use, or not.” More

Calculating the cost per remaining mile can help identify which used cars are the best deal.
Here’s a look at the top 10 models with the lowest prices and longest lifespans.
In the No. 1 spot, a 10-year-old Chevrolet Impala costs less than $10,000 and could last for another 100,000 miles or more.

Buying a used car has typically been considered a smart way to save by avoiding the steep depreciation costs that go hand in hand with new cars.
However, a limited supply of new cars and trucks due to the ongoing chip shortage caused demand for used cars to skyrocket, pushing prices much higher and reducing the value of buying pre-owned.

Now, although costs have cooled slightly, older cars are still sought after and priced accordingly.
To get the best bang for your buck, a recent iSeeCars study analyzed more than 2 million cars to see which used models are priced the lowest and offer the longest remaining lifespan. The report then ranked those models based on the cost per remaining mile calculation to determine which used cars are the best deal.

The 10 best used cars for the money

In the No. 1 spot, a 10-year-old Chevrolet Impala costs about $9,700 with an average remaining lifespan of almost 120,000 miles.
The Toyota Prius is the next best deal, with up to 130,000 miles of drivability left to go for less than $14,000 — in addition to substantially lower fuel costs.
Other top contenders — such as the Kia Sedona, Dodge Grand Caravan, Honda Ridgeline and Ford Fusion — included a range of sedans, SUVs, minivans and a pickup truck.

The average price of the 10-year-old cars and trucks in the top 10 is just $11,819, with over 105,000 miles remaining, the report found — or more than 47% left of their lifespan.
“Shoppers can buy a 10-year-old car that costs substantially less than 1- to 5-year-old used models, yet these vehicles still have 80,000 or more miles of life left in them,” said Karl Brauer, executive analyst for iSeeCars.com.
“Some, like the Toyota Prius, Toyota Avalon and Honda Ridgeline, have more than 125,000 miles to go.”
More from Personal Finance:Interest rate hikes have made financing a car pricier10 cars with the greatest potential lifespanCar deals are hard to come by
Among 5-year-old cars and trucks, the Honda Fit topped the list, costing $18,486, on average, with a remaining lifespan of over 150,000 miles — or almost 75% of its total life, followed by the Civic and Prius.
Overall, five Toyotas made the top 10 list of best 5-year-old used cars for the money, also including the Camry, Corolla and Avalon.
The report looked at 10-year-old models priced between $9,000 and $19,000, with an average remaining lifespan of more than 100,000 miles, as well as 5-year-old models priced between $18,000 and $26,000 with an average remaining lifespan of more than 150,000 miles.  

Top tips for buying a used car

Beyond the standard advice to check for excess wear and tear, request a vehicle history report and bring the car to a repair shop for an inspection, according to Ivan Drury, director of insights at car-shopping comparison website Edmunds. He offered these five tips for anyone in the market for a used car.
1. Mileage is a myth: “Don’t be afraid of the 100,000 mileage marker on your odometer,” Drury said. Because durability has improved significantly over the last decade, “100,000 is not the mileage threshold it used to be.”
“Used car values do not fall off a cliff at 100,000 miles,” he said. “Instead, they continue to follow a very linear reduction in value up to and past 100,000, almost all the way to 150,000.”
2. Being “basic” has its benefits: Going with widely popular models has an added advantage when it comes to buying a used car, Drury said.
“Buying mainstream, high-volume models almost ensures you’ll be near a dealership or repair shop that is familiar with your model and has replacement parts readily available for repairs, translating to easier and more affordable maintenance,” he advised.

Halbergman | E+ | Getty Images

3. Stick with what you know: Similarly, buying from a brand you have had a positive experience with could give you added reassurance compared to purchasing something else that might save you money upfront “but stresses you out each time you start your car,” Drury said.
4. Check the comps: Check out comparables — or older model years of the same vehicle — on marketplaces like Edmunds, CarMax, Facebook Marketplace and Craigslist to see which models are really capable of going the distance, he said.
“Even if you’re looking at something like a 2015 model year, research even older model years of that vehicle to see how many miles others have racked up and their prices for future predictions of value retention,” Drury advised.
5. Be ready to jump on a good deal: With demand still elevated, lower-priced used vehicles will not make it more than a few weekends before selling, so be prepared to act quickly, he said.
A five-year-old, $25,000 car will only last 39 days on the lot, on average, according to data from Edmunds. For a 10-year-old, $12,000 car that number falls to just 27 days.
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2022 was challenging for the world’s major automakers, as supply-chain disruptions made it hard to produce enough vehicles to meet demand.
The disruptions are now easing and dealers should have more cars to sell.
But with recessionary fears lurking, will consumers buy without profit-eroding discounts?

A sale sign is seen at car dealer Serramonte Subaru in Colma, California.
Stephen Lam | Reuters

High interest rates, supply chain problems and recessionary fears were among the major challenges for the global automotive industry in 2022.
Those issues aren’t expected to be resolved quickly next year, or at all, and there’s growing concern that this year’s supply shortages could quickly turn into a “demand destruction” scenario, which Wall Street has been watching for signs of as of late this year, just as production is ramping back up.

“There is active demand destruction in the industry, given inflation, interest rates, and energy costs − but so far, this has mostly impacted the backlog,” Bernstein analyst Daniel Roeska wrote in an investor note earlier this month.
As vehicle production ramps back up, Roeska wrote that markets early next year will be looking to understand where, when and how much pain automakers will feel.
Auto sales could still rise
Unlike traditional downturns or past periods when demand was soft, most analysts expect global and U.S. auto sales to rise in 2023. That’s mostly because auto sales were already at- or near-recessionary levels in the U.S. and other parts of the world since the onset of the COVID-19 pandemic in early 2020.
The pandemic disrupted manufacturing and supply chains around the world, forcing automakers to cut production way back. The resulting shortage of new cars, trucks, and SUVs meant that automakers and dealers demanded – and got – much higher prices for the vehicles they were able to deliver.
“New vehicle supply is finally improving but the industry is swapping a supply problem with a demand problem and that doesn’t bode well for revenues and profits in the year ahead,” Cox chief economist Jonathan Smoke said in a recent video.

Cox Automotive is forecasting U.S. new vehicle sales of 14.1 million in 2023, which Charlie Chesbrough, Cox’s senior economist and senior director of industry insights, described as “tepidly optimistic.”
Analysts expect this year’s U.S. auto sales to total about 13.7 million. U.S. sales were 15.1 million in 2021 and 14.6 million in 2020.
S&P Global Mobility expects new vehicle sales globally to reach nearly 83.6 million units in 2023, a 5.6% increase from the previous year. In the U.S., the data and consulting firm expects sales will be up by 7%, to about 14.8 million units in 2023.
Chesbrough noted that the expected increase comes as many lower-income and subprime borrowers, who would typically leave the new vehicle segment during a recession, have already done so because of low inventories and record-high prices.
But fat profits may be at risk
Those sales increases will likely come at the expense of the unprecedented pricing power and profits automakers have enjoyed on new vehicles over the last couple of years.
“Ongoing supply chain challenges and recessionary fears will result in a cautious build-back for the market. US consumers are hunkering down, and recovery towards pre-pandemic vehicle demand levels feels like a hard sell. Inventory and incentive activity will be key barometers to gauge potential demand destruction,” said Chris Hopson, manager of North American light vehicle sales forecast at S&P Global Mobility, in a statement.
Put another way, will higher interest rates, growing recession fears, and too much inventory force automakers to cut prices − and give up profits − to draw potential buyers to showrooms?
That would be good news for consumers, who have been facing record-high prices this year on new vehicles. But if so, it’ll come at a cost to automakers − and possibly their shareholders.

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Restaurant chains are experimenting with automation as the labor crunch pressures profits.
But robots and other labor-saving technology is still expensive, and it’s not clear how and when automation will pay off for restaurant operators.
For now, major chains are still testing the technologies.

A White Castle team member next to Miso Robotics’ Flippy.
Courtesy: Miso Robotics

Chipotle Mexican Grill is testing whether a robot can make tortilla chips in stores. Sweetgreen plans to automate salad making in at least two locations. And Starbucks wants its coffee-making equipment to lessen the workload for baristas.
This year brought a flurry of automation announcements in the restaurant industry as operators scrambled to find solutions to a shrinking workforce and climbing wages. But the efforts have been spotty so far, and experts say it will be years before robots pay off for companies or take the place of workers.

“I think there’s a lot of experimentation that is going to lead us somewhere at some point, but we’re still a very labor intensive, labor-driven industry,” said David Henkes, a principal at Technomic, a restaurant research firm.
Even before the pandemic, restaurants were struggling to attract and retain workers. The global health crisis exacerbated the issue, as many laid-off workers left for other jobs and didn’t return. Three-quarters of restaurant operators are facing staffing shortages that keep them from operating at full capacity, according to the National Restaurant Association.
Many restaurant operators hiked wages to attract workers, but that pressured profits at a time when food costs were also climbing.
Automation startups pitch themselves as a solution. They say robots can flip burgers and assemble pizzas more consistently than overworked employees, and that artificial intelligence can enable computers to take drive-thru orders more accurately.

The year of the robot

Many of the industry’s buzzy automation announcements this year came from Miso Robotics, which has raised $108 million as of November and has a valuation of $523 million, according to Pitchbook.

Miso’s flashiest invention is Flippy, a robot that can be programmed to flip burgers or make chicken wings and can be rented for roughly $3,000 a month.
Burger chain White Castle has installed Flippy at four of its restaurants and committed to adding the technology to 100 as it revamps locations. Chipotle Mexican Grill is testing the equipment, which it calls “Chippy,” at a California restaurant to make tortilla chips.
“The highest value benefit that we bring to a restaurant is not to reduce their expenses, but to allow them to sell more and generate a profit,” Miso CEO Mike Bell told CNBC.
At Buffalo Wild Wings, however, Flippy hasn’t progressed out of the testing phase after more than a year. Parent company Inspire Brands, which is privately held and also owns Dunkin’, Arby’s and Sonic, said Miso is just one of the partners it has worked with to automate frying chicken wings.
Another startup, Picnic Works, offers pizza assembly equipment that automates adding sauce, cheese and other toppings. A Domino’s franchisee is testing the technology at a Berlin location.
Picnic rents out its equipment, with prices starting at $3,250 a month. CEO Clayton Wood told CNBC that subscriptions make the technology affordable for smaller operators. The startup has raised $13.8 million at a valuation of $58.8 million, according to Pitchbook.
At Panera Bread, automation experiments have included artificial intelligence software that can take drive-thru orders and a Miso system that checks coffee volume and temperatures to improve quality.
“Automation is one word, and a lot of people go right to robotics and a robot flipping burgers or making fries. That is not our focus,” said George Hanson, the chain’s chief digital officer
But success is far from guaranteed. In early 2020, Zume pivoted from using robots to prep, cook and deliver pizza to focus on food packaging. The startup, which did not respond to a request for comment, received a $375 million investment from SoftBank in 2018 that reportedly valued it at $2.25 billion.

The labor question

Automation often faces pushback from workers and labor advocates, who see it as a way for employers to eliminate jobs. But restaurant companies have been touting their experiments as ways to improve working conditions by doing away with tedious tasks.
Next year, Sweetgreen plans to open two locations that will largely automate the salad-making process with the technology it acquired by buying startup Spyce. The new restaurant format will cut down on the number of workers needed for shifts, Sweetgreen co-founder and Chief Concept Officer Nic Jammet said at the Morgan Stanley Global Retail and Consumer Conference in early December.
Jammet also listed an improved employee experience and lower turnover rates as secondary benefits. A representative for Sweetgreen declined to comment for this story.
Casey Warman, an economics professor at Dalhousie University in Nova Scotia, expects the restaurant industry’s push for automation will permanently shrink its workforce.
“Once the machines are in place, they’re not going to backwards, especially if there’s large cost savings,” he said.
And Warman noted that Covid reduced the pushback against automation, as consumers got more used to self check-outs at grocery stores and mobile apps to order fast food.
Dina Zemke, an assistant professor at Ball State University who studies consumer attitudes about automation in restaurants, also noted that consumers are getting tired of reduced restaurant hours and slower service that have come with labor shortages.
In a Technomic survey conducted in the third quarter, 22% of roughly 500 restaurant operators said they are investing in technology that will save on kitchen labor and 19% said they’ve added labor-saving tech to front of house tasks such as ordering.

Long-term skepticism

At this point, it’s unclear if or when any cost savings will materialize.
More than a year and a half ago, McDonald’s began testing software that could take drive-thru orders after acquiring Apprente, an artificial intelligence startup. Several months after revealing the test, the fast-food giant sold the unit to IBM as part of a strategic partnership to further the technology.
At the roughly two dozen Illinois test restaurants, the voice-ordering software had an accuracy in the low 80% range, well below the target of 95%, according to a research report from BTIG analyst Peter Saleh this June.

McDonald’s crowds at self-service kiosk.
Jeffrey Greenberg | Universal Images Group | Getty Images

And on an earnings call this summer, McDonald CEO Chris Kempczinski threw cold water on the feasibility of total automation.
“The idea of robots and all those things, while it maybe is great for garnering headlines, it’s not practical in the vast majority of restaurants,” he said. “The economics don’t pencil out … You’re not going to see that as a broad-based solution anytime soon.”
In the meantime, automation may have more potential in less noticeable tasks. Jamie Richardson, vice president of White Castle, said less flashy changes like installing Coca-Cola Freestyle machines have had a more outsized impact on sales.
“Sometimes the bigger automation investments we make aren’t as earth shattering,” Richardson said.

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Some Chinese provinces’ intensive care beds and resources are nearing capacity as Covid-19 infections soar, national health authorities said Tuesday.
It is unclear at what scale Covid outbreaks have hit mainland China, with few official figures on recent infections and deaths.

People wait outside a fever clinic at Tongren Hospital in Shanghai on Dec. 23, 2022, amid a local outbreak of Covid-19 infections.
Hector Retamal | Afp | Getty Images

BEIJING — Some Chinese provinces’ intensive care beds and resources are nearing capacity as Covid-19 infections soar, national health authorities said Tuesday.
“In provinces currently experiencing high demand for intensive care, they are nearing the critical threshold of available ICU beds and resources,” Jiao Yahui, director of the medical affairs department at China’s National Health Commission, said during a press conference. That’s according to a CNBC translation of the Mandarin remarks.

In such regions, Jiao said, “it is necessary to expand the availability of ICU beds and resources, or speed up turnover.”
Overall, Jiao claimed national availability of ICU beds was sufficient, at 12.8 per 100,000 people as of Dec. 25.
Early this month, mainland China abruptly ended many Covid controls. Infections have meanwhile surged, pressuring the country’s already stretched health system.
It is unclear at what scale Covid outbreaks have hit the country, with few official figures on recent infections and deaths. China’s National Health Commission on Sunday stopped sharing daily figures after a halt in mandatory virus testing.

Some local governments have disclosed details on the regional situation.

Zhejiang province — bordering Shanghai — said Sunday that daily Covid infections in the region have surpassed 1 million, and will likely double to a peak of 2 million a day around New Year’s. The province has a population of about 65.4 million.
In the capital city of Beijing — one of the earliest to see a Covid wave — the share of severe cases and elderly patients has increased at fever clinics, according to an official report Saturday. It cited a director at a local hospital as saying the share of visits by the elderly had climbed from below 20% to nearly 50%.

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China’s health authorities were speaking Tuesday at a briefing on the country’s new Covid measures, released late Monday. The policy changes included plans to scrap quarantine for inbound travelers starting Jan. 8.
“We view the new guidelines as a major step towards the full reopening, but caution on the increased challenges to China’s medical system in the near term,” Goldman Sachs analysts said in a note Tuesday.
“The frontloaded China reopening timetable adds conviction to our below-consensus forecast for Q4 GDP growth (+1.7% yoy) and above-consensus 2023 GDP forecast (+5.2% yoy),” the analysts said.

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Covid cases in China saw a spike following the country’s relaxation of strict Covid rules. Also rising: the prices of traditional Chinese medicine and lemons, as Chinese citizens scramble for protection from the virus.
Prices of fruits rich in vitamin C and antioxidants are seeing surges due to higher demand.
Shares of Chinese pharmaceutical companies involved in the production of traditional Chinese medicine also notched their highest figures in a year in early December.

Farmers sort and package lemons at a workshop on November 24, 2020 in Neijiang, Sichuan Province of China.
Huang Zhenghua | Visual China Group | Getty Images

Covid cases in China saw a spike following the country’s relaxation of strict zero-tolerance rules. Also rising: the prices of traditional Chinese medicine and lemons, as Chinese citizens scramble for protection from the virus.
Prices of fruits rich in vitamin C and antioxidants are seeing surges due to higher demand.

This month, one grocery store in Beijing charged 13 yuan ($1.86) for two lemons, which is about twice the typical price.
Other locals have taken to social media platforms such as Weibo to complain about lemon inflation, with one user saying she forked out 12 yuan ($1.72) for three lemons.
“I did not know that lemon prices could triple in one day,” posted another Weibo user.
At one point, lemons were out of stock in Chengdu on e-commerce platform Dingdong Maicai, according to a local media report.
Canned peaches are seeing a swell in demand. Fresh Hippo, another e-commerce merchant owned by Alibaba, reported that week-on-week sales of canned yellow peaches popped almost 900%.

A notice is posted at a community health service station in Beijing, China, December 14, 2022, showing that Chinese patent medicines such as Lianhua Qingwen granules are temporarily out of stock.
CFOTO | Future Publishing | Getty Images

Shares of Chinese pharmaceutical companies involved in the production of traditional Chinese medicine notched their highest levels in a year earlier this month, following a spike in Covid caseloads and endorsements by officials for the herbal remedies.
Shijiazhuang Yiling Pharmaceutical, which produces the popular herbal treatment Lianhua Qingwen, surged 184% in early December from a year earlier.
China Resources Sanjiu Medical & Pharmaceutical similarly saw a more than 142% spike in the end of November compared with the same period last year.
The president of the Beijing Hospital of Traditional Chinese Medicines, Liu Qingquan, said in a December briefing that traditional Chinese medicine, if taken with Western remedies, “has a very good effect” on stimulating gastrointestinal functions as well as treating fever and other symptoms linked to the Omicron strain.
In the past few weeks, local and central government authorities in China U-turned from their draconian zero-Covid measures which, among other things, had required people to stay home and many businesses to operate mostly remotely.
On Monday, China announced that inbound travelers no longer need to quarantine upon arrival on the mainland starting next year.
– CNBC’s Evelyn Cheng contributed to this report

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China’s National Health Commission announced late Monday that starting Jan. 8, inbound travelers would no longer need to quarantine upon arrival on the mainland, ending a policy of nearly three years.
Within half an hour of China’s announced policy change, searches for travel abroad surged to a three-year high, according to Trip.com Group.
The U.S. and Southeast Asian countries were among the top 10 overseas destinations with the fastest-growing search volume, the travel booking company said.

Travelers check in at Shanghai’s Hongqiao International Airport in on Dec. 12, 2022, after China relaxed domestic travel restrictions.
Qilai Shen | Bloomberg | Getty Images

BEIJING — Now that China is set to reopen its borders, locals are rushing to plan overseas travel for the Lunar New Year in late January, according to Trip.com Group.
Within half an hour of China’s announced policy change, searches for travel abroad surged to a three-year high, the travel booking company said.

Japan, Thailand, South Korea, the U.S., Singapore, Malaysia, Australia and the U.K. made the list of top 10 destinations outside the mainland with the fastest-growing search volume, the company said. Macao and Hong Kong also made the list, which did not include any countries on the European continent.
China’s National Health Commission announced late Monday that starting Jan. 8, inbound travelers would no longer need to quarantine upon arrival on the mainland, ending a policy of nearly three years.
Authorities also said they would allow Chinese citizens to resume travel, without providing details on timing or process.
During the pandemic, Beijing prevented Chinese citizens from getting passports or leaving the country unless they had a clear reason, typically for business.
The Lunar New Year, also known as the Spring Festival, is one of the biggest public holidays in China. In 2023, the holiday runs from Jan. 21 to 27.

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China announced Monday that starting Jan. 8, 2023, travelers will no longer need to quarantine upon arrival on the mainland.
China said it would improve visa arrangements for foreigners to enter the country for resumption of work, business, study, visiting relatives and other gatherings.
Chinese citizens’ ability to travel overseas will be “resumed in an orderly manner,” the announcement said.

Passenger planes sit on the tarmac at Shanghai Hongqiao International Airport on Nov. 4, 2022, before China ended Covid-related restrictions on travel.
Future Publishing | Future Publishing | Getty Images

BEIJING — China announced late Monday that travelers will no longer need to quarantine upon arrival on the mainland starting Jan. 8.
The forthcoming shift follows an abrupt relaxation this month in domestic Covid controls. The changes end the bulk of the most restrictive measures that China had imposed for nearly three years under its zero-Covid policy.

Since March 2020, travelers to the mainland have had to quarantine, typically at a designated hotel and for 14 days. That isolation period subsequently began to increase to 21 days or more for some travelers, before China began cutting quarantine times this summer.
Current policy requires five days of quarantine at a centralized facility, followed by three days at home.
China’s National Health Commission also said that effective Jan. 8, authorities would stop tracking close contacts of Covid patients, halt the designation of Covid risk areas and cancel Covid measures that had slowed the import of goods.
The commission said travelers to China would only need to show a negative virus test from within the last 48 hours, and wouldn’t have to apply for a clear health code anymore. While on the flight, passengers would need to still wear a face mask, the announcement said.

China’s economy slowed this year amid stringent Covid controls that locked down Shanghai for about two months, as well as other parts of the country. Beijing suddenly ended many of the restrictions earlier this month. Meanwhile, local Covid infections surged, pressuring an already stretched public health system.

More flights needed

The inbound quarantine requirement and other Covid-related measures have made it difficult for foreign businesses in China to bring in staff, executives and factory technicians.
“Just because the borders are open doesn’t mean travel will bounce back immediately,” Michael Hart, president of the American Chamber of Commerce in China, said last week.
He noted the number of available flights in and out of China has to recover. “I don’t think the U.S. carriers or the international carriers will immediately go back to normal because those airplanes are already flying other routes,” Hart said. “It may be different with Chinese airlines, because the airplanes are just sitting on the tarmac doing nothing.”

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In 2019, China said there were 670 million international trips in and out of the country. In 2021, the number had plunged to 128 million, according to the National Immigration Administration.
China said Monday it would improve visa arrangements for foreigners to enter the country for resumption of work, business, study, visiting relatives and other gatherings.
Chinese citizens’ ability to travel overseas will be “resumed in an orderly manner,” the announcement said in Chinese, according to a CNBC translation.
During the pandemic, Beijing prevented Chinese citizens from getting passports or leaving the country unless they had a clear, typically business, purpose.
Previously, Chinese tourists and their spending overseas — especially for luxury goods— had been a significant source of income for businesses in many international tourist spots.

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