Is China attracting foreign visitors?

Is China attracting foreign visitors?
Is China attracting foreign visitors?
Is China attracting foreign visitors? Top

    Power is traditionally discussed in terms of affecting outcomes within the international system through either threats or coercion. How countries leverage their international image to persuade others to support their interests is equally important. As such, it is crucial to assess the global appeal of China and how the Chinese government seeks to cultivate its soft power. This feature explores the attractiveness of China by examining trends in inbound tourism, the impact of Chinese tourists on the economies and perceptions of the countries they visit, and how the Chinese government utilizes tourism as a political tool to further Chinese interests.

    Tourists Visiting China


    Where do most of China’s tourists come from?

    Tourism is becoming increasingly important to China as both a source of revenue and a means to enhance its international image. China is currently the fourth most popular tourist destination behind France, the United States, and Spain. In 2016, over 141 million non-residents visited China. This number, however, is somewhat misleading. Tourists coming from Hong Kong, Macau, and Taiwan account for approximately 78 percent of China’s inbound tourists. When adjusted to exclude these destinations, the number of foreign tourists is closer to 31.5 million, with South Korea, Japan, Myanmar, the United States, and Vietnam as the top foreign sources of tourism into China.

    The economic benefits of tourism for China are huge. China ranked second in the world for travel and tourism’s contribution to GDP ($1,349 billion) in 2017, and first in the world for travel and tourism’s total employment contribution at 79.9 million jobs. That year, China invested $155 billion into its tourism infrastructure, a figure second only to the United States’ ($176.3 billion). Tourism, based on direct, indirect, and induced impact, accounted for 11 percent of China’s GDP in 2017. The World Travel and Tourism Council projects that by 2028, China’s economy will benefit from travel and tourism more than any other country, at $2,731.5 billion in contributions to GDP.

    The Chinese government . . . aims to promote tourism diplomacy. . . . This is a link to China’s grand strategy, or more specifically the initiative of “One Belt One Road.” This policy . . . shows that the Chinese government has decided to change the role of tourism in its diplomacy.

    – Jin Kai

    China’s inbound tourism market has fluctuated over the last decade. After experiencing downturns from 2011 to 2014, inbound tourism picked up again with 2016’s inbound tourist rate up 10 percent from 2014. By October 2016, revenue from inbound tourism had reached a record high of 11.3 billion dollars in that month alone.

    In some instances, diplomatic and political tensions appear to negatively affect China’s inbound tourism. In the past decade, Sino-Japanese relations have been periodically tense, and the number of tourists visiting China from Japan decreased annually by almost 19 percent between 2004 and 2015. In 2016, however, inbound tourists from Japan increased by 4 percent.

    Conversely, the Philippines and Vietnam have both been embroiled in contentious territorial disputes with China, yet between 2012 and 2016, inbound Filipino and Vietnamese tourists rose by 18 percent and 27 percent, respectively. Amidst contentious relations with the United States, the number of inbound American tourists into China rose by 24 percent between 2009 and 2012, before falling by almost 2 percent in the following year. Since 2013 inbound tourist rates from the US have remained steady at roughly 2.1 million visits per year.

    The Chinese government has also made a concerted effort to attract foreigners to China. Since securing the bid to host the 2008 Olympics in Beijing, China has continued to emphasize tourism as a national priority. China hosted the Shanghai Expo in 2010, which attracted 4.2 million foreign visitors. Beijing also won the bid to host the 2022 Winter Olympics and established a committee to ensure that permanent tourist destinations and public facilities are created. As the number of foreign visitors continues to increase, China’s investment in domestic tourism is likely to expand. By 2028, it is estimated that China will invest nearly $310 billion in tourism and travel, more than double what it spent in 2017, and surpassing the United States’ projected $303 billion. It is further estimated that China’s inbound travel and tourism’s contribution to GDP will increase by 6.5 percent annually from 2018 to 2028.


    Where are Chinese tourists traveling abroad?

    The uptick in foreign visitors traveling to China is paralleled by an increased rate of Chinese tourists traveling abroad. China’s growing economic strength and expanding middle class with disposable income have facilitated a dramatic increase in outbound tourism.1 Chinese citizens traveled outside of the mainland at least 131 million times in 2017, a 7 percent increase from the previous year. Of those tourists, more than 67 percent visited other countries or regions in Asia. Aside from Hong Kong, Macau, and Taiwan – which are among the top destinations for Chinese tourists – large numbers of Chinese also visited Japan, Thailand, and Korea in 2017.

     


    Perhaps more important than the sheer numbers of Chinese citizens traveling abroad is the amount they are spending. In 2016, the U.S. Department of Commerce estimated that Chinese tourists spent an average of $11,111 in the United States, compared with an average of $3,237 for all international tourists. Much of this money is being spent on high-end luxury goods, as Chinese tourists on average spend 10 percent more of their travel budget on shopping than non-Chinese tourists. Chinese tourists in France flock to retailers of brands like Louis Vuitton, Chanel, and Dior. The world-renowned Galleries Lafayette in Paris reported that in 2009, the average Chinese tourist spent around 1,000 euros. Fashion items constituted 87 percent of this spending.2

    While China has emerged as a major player in the international luxury goods market as outbound tourism increased, many analysts believe that this trend may be changing. McKinsey found in a 2018 survey that, while 19 percent of Chinese travelers prefer to shop while on holiday, an even higher percentage of Chinese travelers, 20 percent, place sightseeing as their top priority.

    There are over a thousand flights between China and South Korea every single week, and this is how people-to-people exchanges, or in other terms, public diplomacy, may help to build and change a country’s international image.

    – Jin Kai

    Tourists leave an indelible impact on the places they travel, which can have long-lasting consequences for how China is perceived worldwide. In recent years, there have been some high-profile cases of local residents disapproving of Chinese tourists’ behavior while visiting their countries. In 2013, a young Chinese tourist stirred an international controversy by carving graffiti onto an ancient Egyptian relic at Luxor. Incidents of Chinese parents allowing their children to defecate in public have sparked outrage in both Hong Kong and Taiwan.

    While there are bound to be isolated examples of tourists from any country behaving inappropriately on foreign soil, in 2006, the Chinese government launched a nationwide advertising campaign to educate Chinese tourists on suitable behavior when abroad. These guidelines included a “civilized tourist behavior guidebook” that outlined clear guidelines for acceptable behavior, such as dressing appropriately and eating quietly. In addition, the China National Tourist Administration issues guidelines ahead of major travel holidays reminding Chinese tourists to “be civilized.”  In 2016, the Chinese government publicly banned twenty tourists from future travel due “uncivilized” behavior; by September 2018, this blacklist had grown to 35 people. The government’s approach reveals a clear desire for Chinese nationals to be perceived positively across the globe, thereby improving China’s international image.

    FDI

    Perceptions play an indelible role in international politics. Learn more about how China is viewed regionally and globally, as well as how Chinese people view their own country.

    It is unclear if the government’s initiative to cultivate this positive image is paying off. Over 18 million Chinese tourists visited Hong Kong in 2017, amounting to nearly 32 percent of all tourists into the autonomous territory. However, a University of Hong Kong study found that negative feelings toward mainland Chinese were increasing exponentially from year to year. In response to the study, when the Hong Kong newspaper The South China Morning Post conducted an online survey asking “What makes some Hongkongers dislike mainland China and its people?,” over 50 percent of the respondents cited “ill-behaved tourists” as the reason for their negative opinion.


    In what ways does China use tourism to influence international politics?

    China’s increasing stake in international tourism and the financial impact of Chinese tourists have afforded the Chinese government an opportunity to indirectly affect international politics. As noted above, the Chinese government has actively sought to influence the behavior of tourists in an effort to improve perceptions of China. The government has also used tourism as a mechanism for exerting political pressure by restricting or threatening to restrict Chinese tourists’ access to certain countries.

    The Ministry of Culture and Tourism absorbed the China National Tourist Administration in March 2018, and is now charged with controlling China’s outbound tourism through the Approved Destination Status (ADS) policy. The policy restricts overseas travel by Chinese nationals to an approved list of countries and forces Chinese citizens to travel in tightly controlled groups. Typically, ADS agreements enable Chinese travel agencies to reduce the cost of obtaining a visa by submitting visa applications for an entire group at once and providing packaged tours. While these agreements have facilitated greater overseas travel for Chinese tourists, the ADS scheme also affords the Chinese government with the means to direct such travel. In 1995, the first year of the policy, only six countries were granted ADS agreements. By 2018, the number of countries that have ADS agreements with China had increased to 153.

    A Conversation with Jin Kai

    Research Fellow, Center for International Studies, Yonsei University

    The Chinese government has a demonstrated history of using its tightly controlled tourism scheme to strategically promote its political agenda. In an effort to boost cross-strait relations and bolster Taiwan’s sagging economy, the Chinese government actively encouraged Chinese tourists to visit Taiwan when the Kuomintang returned to power in 2008. However, this trend reversed when the Democratic Progressive Party came to power in 2016. Since the inauguration of President Tsai Ing-wen in May of that year, mainland Chinese tourism to Taiwan fell sharply, sinking to a 48 percent loss within the first five months of the new administration.

    All countries that provide formal diplomatic recognition to Taiwan have been banned from ADS agreements. Oceania is stage to an ongoing diplomatic competition between China and Taiwan, with eight countries recognizing the People’s Republic of China (Mainland China) and six countries that have diplomatic relations with the Republic of China (Taiwan). It was reported that Fiji, which generates more than a third of its gross domestic product through its tourism industry, was only granted an ADS agreement by China in return for denying diplomatic recognition to Taiwan. China has also used this tactic to undermine Grenada and Dominica’s formal relations with Taiwan, both of which have been severed.

    China has also demonstrated a willingness to suspend or threaten to suspend leisure travel to approved ADS locations as a means of applying political pressure. The Philippines was granted ADS status in 1992. In 2017, Chinese tourism to the Philippines surged to over 968 million visitors that year, up 44 percent from 2016.  However, increasing bilateral tensions between China and the Philippines over territorial disputes such as Scarborough Shoal in the South China Sea has led to a disruption of outbound Chinese tourism. When tensions between China and the Philippines in the South China Sea flared in 2012, China suspended tour groups from visiting the Philippines. The Chinese government took additional economic measures during the crisis, reportedly quarantining hundreds of containers of Philippine bananas and other tropical fruits, claiming the shipments were contaminated. The Philippines example provides a clear indication that China is willing to employ tourism, a widely accepted form of indirect or soft power, in a coercive manner.  ChinaPower

    1. David L. Shambaugh, China Goes Global: The Partial Power (UK: Oxford University Press, 2013), 255.
    2. David L. Shambaugh, China Goes Global: The Partial Power (UK: Oxford University Press, 2013), 255.