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.

    China as a Global Tourist Destination

    Tourism is becoming increasingly important to China as both a source of revenue and a means of enhancing its international image. In 2018, nearly 159 million “visitors” traveled to China. This figure includes all non-residents traveling to China for any length of time or purpose. That same year, China received 62.9 million “tourists” – travelers staying in the country for at least one night.

    These numbers, however, are somewhat misleading. Visitors coming from Hong Kong, Macau, and Taiwan account for 69.8 percent of China’s total. When adjusted to exclude these locations, the number of visitors is closer to 48 million. In 2018, Myanmar, Vietnam, South Korea, Japan, and the United States led the way as top sources of visitors into China. That year, China was the fourth most popular tourist destination behind France, Spain, and the United States.

    The economic benefits of tourism are enormous for China. In 2018, China ranked second in the world for the contribution of travel and tourism to GDP ($1.5 trillion) and first in the world among top earners for the contribution to employment (79.9 million jobs). That same year, China invested $155 billion into its tourism infrastructure, a figure second only to that of the United States ($176.3 billion). Overall, tourism and travel accounted for 11 percent of China’s total GDP in 2018. 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 $2.7 trillion in contributions to GDP.

    Top Sources of Visitors to China (2018)
    Country Number of Visitors Share of Total (%)
    Myanmar 12,379,845 7.8
    Vietnam 7,587,932 4.8
    South Korea 4,191,790 2.6
    Japan 2,689,662 1.7
    US 2,483,554 1.6
    Source: UN World Tourism Organization

    Unexpected events and circumstances can significantly impact tourism rates. The outbreak of a new coronavirus originating in the Chinese city of Wuhan, for example, is likely to significantly impact tourism around the world and especially in China. As the number of infected people skyrocketed in the first several weeks of 2020, Beijing banned outgoing tourist groups. Several countries and airlines also began restricting travel to and from China.

    Diplomatic and political tensions can also impact tourism to China. Strained ties between Japan and China contributed in part to a steady decline in Japanese visitors from 3.7 million in 2010 to 2.5 million in 2015. The steepest one-year fall in recent years saw Japanese tourism to China drop 7.8 percent between 2012 to 2013 in the wake of Sino-Japanese territorial disputes in the East China Sea. Beginning in 2016, however, tourism from Japan increased for three consecutive years, coinciding with thawing ties between the two East Asian countries.

    Conversely, China’s inbound tourism from some countries has overcome political difficulties. Between 2013 and 2018, visitors from the Philippines rose by 21 percent and travel from Vietnam swelled by more than five-fold, despite contentious territorial disputes between the two Southeast Asian nations and China.

    The Chinese government has 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. 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. Securing the 2022 Winter Olympics bid was aligned with the State Council’s five-year plan for tourism development, released in 2016, which listed winter sports tourism as an important part of the country’s ambition to raise tourism revenues to RMB 7 trillion (about $1 trillion) by 2020.

    As the number of foreign visitors to China 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 doubling what it spent in 2017 and surpassing projected US spending of $303 billion. It is further estimated that the contribution of inbound travel and tourism to China’s GDP will increase by 6.5 percent annually from 2018 to 2028.

    China as a Source of Tourists

    The uptick in foreign visitors traveling to China is paralleled by an increased rate of Chinese tourists traveling abroad. China’s expanding middle class, with increasing disposable income, has facilitated a dramatic increase in outbound tourism.1 Chinese citizens traveled outside of the mainland nearly 149 million times in 2018, a 4.7 percent increase over the previous year. Of those tourists, a large majority traveled to destinations 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 South Korea.

    The US is also a top destination for Chinese tourists. According to the US International Trade Administration, about three million Chinese visitors traveled to the US in 2018. This made China the fifth-largest source of tourists to the US that year – behind Canada (21.5 million), Mexico (18.4 million), the UK (4.7 million), and Japan (3.5 million). However, tourism from China declined nearly 6 percent from 2017 to 2018, and is projected to have declined another 5 percent in 2019. Prolonged economic and political tensions between Washington and Beijing is likely to blame, but China’s economic slowdown may also be weighing down Chinese tourists.

    In 2018, Chinese visitors spent an average of more than $11,500 per person in the US, compared with a combined average of just under $2,900 per person from all other countries.2 In total, Chinese tourists spent $34.6 billion in the US in 2018, contributing 13.5 percent of all tourism spending in the country that year.

    Top Five Global Sources of Travelers (2018)
    Country Number of Travelers (Millions)
    China 148.7
    Germany 108.5
    United States 92.6
    United Kingdom 70.4
    Italy 33.3
    Source: UN World Tourism Organization

    Much of this money is 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.3

    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.

    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.

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    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 issued guidelines in 2013 reminding Chinese tourists to “be civilized.” 

    In 2016, the Chinese government publicly banned twenty tourists from future travel due to “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.

    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, over 50 percent of the respondents cited “ill-behaved tourists” as the reason for their negative opinion, 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?”

    China’s Use of 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.

    Number of Countries with Approved Destination Status (ADS)
    Year Number of Countries
    2000 14
    2005 76
    2010 110
    2015 119
    2019 131
    Source: China’s Ministry of Culture and Tourism

    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 July 2019, 131 countries had ADS agreements with China.

    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 Democratic Progress Party leader Tsai Ing-wen became president in 2016. During the first five months of her administration, tourism from mainland China to Taiwan plummeted 48 percent.

    All countries that maintain formal diplomatic ties with Taiwan have been banned from ADS agreements. Between 2016 and 2019, Taiwan lost diplomatic ties with seven countries. Panama broke from Taiwan in 2017 in favor of establishing ties with mainland China and was granted an ADS agreement shortly thereafter. In 2018 and 2019, the Dominican Republic and the Solomon Islands switched diplomatic recognition from Taiwan to mainland China and were quickly recognized by Beijing as tourist destinations for Chinese citizens.

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    Additionally, 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 used similar tactics in its efforts to lure Grenada and Dominica into breaking ties with Taiwan.

    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 968,000 tourists – up 43 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.

    China took similar measures against South Korea in 2017 after the deployment of the Terminal High Altitude Area Defense (THAAD). Beijing expressed its opposition to THAAD by banning group tours to South Korea. As a result, Chinese tourism to South Korea collapsed from a record high of 8.1 million in 2016 to 4.2 million visitors in 2017 after decades of nearly continuous growth. The experiences of the Philippines and South Korea provide 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. Includes spending on education.
    3. David L. Shambaugh, China Goes Global: The Partial Power (UK: Oxford University Press, 2013), 255.