Tourism industry shrinkage and the economic loss of China in the COVID pandemic years

Tourism industry represents one of the industry sectors which are ravaged mostly by the COVID pandemic. This study attempts to systematically quantify the economic loss to China triggered by the shrinkage of tourism industry during two pandemic years, 2020 and 2021. For this purpose, we develop a double-sided spatial shrinking (DSSS) model to calculate the loss of regional domestic tourism income in China due to travel restrictions. Then the multi-regional input-output model (MRIO) and the computable general equilibrium (CGE) model are employed to estimate the aggregate loss to Chinese economies in both the short and long terms. Besides significant theoretical contributions, we suggest practical approaches to how to respond effectively to the pandemic shock.