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. Equally important is how countries leverage their international image to persuade others to support their interests. As such, it is crucial to assess the global appeal of China and how the Chinese government seeks to cultivate its soft power. This question 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 means to enhance its international image. China currently ranks fourth in the world as a tourist destination, behind France, the United States, and Spain. In 2013, over 55 million tourists visited China. This number, however, is somewhat misleading. Tourists coming from Hong Kong, Macau, and Taiwan account for approximately 80 percent of China’s inbound tourists. When adjusted to exclude these destinations, the number of foreign tourists is closer to 26 million, with South Korea, Japan, Russia, the United States, and Vietnam as the top foreign sources of tourism into China.

    The economic benefits of tourism for China are huge. China ranks second in the world for travel and tourism’s contribution to GDP ($943.1 billion in 2014), and first in the world for travel and tourism’s contribution to employment (66,086,000 jobs in 2014). In 2014, China invested $136.8 billion into its tourist infrastructure, a figure second only to the United States ($144.3 billion). Tourism, based on direct, indirect, and induced impact, accounted for 9.3 percent of China’s GDP in 2013.

    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

    While China’s inbound tourism directly accounted for an estimated $475.41 billion in revenue in 2013, China has been struggling to maintain consistent growth in its tourism sector. From 2012 to 2014, the numbers of inbound tourists declined approximately 2.5 percent. In 2015, China began to report positive trends in its inbound tourism numbers, with an estimated increase of 4.4 percent from January to October 2015.The number of Vietnamese tourists in 2015 alone increased by an estimated 33.6 percent for the first 10 months of the year.

    Diplomatic and political tensions appear to have a mixed correlation with China’s inbound tourism. For 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 2014. Conversely, the Philippines and Vietnam have both been embroiled in contentious territorial disputes with China, yet between 2009 and 2013 inbound Filipino and Vietnamese tourists rose by 33 percent and 65 percent, respectively. Amidst contentious relations with the United States over the same period, 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.

    The Chinese government has also made a concerted effort to attract foreigners to China. Since securing the rights 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. In September 2015, President Xi Jinping described tourism as a “bridge between civilizations and cultures,” as well as “an important driving force for economic development.” As the number of foreign visitors continues to increase, China’s investment in domestic tourism is likely to expand. By 2025, it is estimated that China will invest approximately 90 percent more in the domestic travel and tourism industry than it did in 2015, surpassing the United States. It is further estimated that China’s growth in inbound travel and tourism’s contribution to GDP will increase by 6 percent from 2015 to 2025.

    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 has facilitated a dramatic increase in outbound tourism.1 Following 2009, Chinese tourism grew at a rate of about 30 percent per year.2 Large volumes of Chinese tourists now travel to Thailand, Korea, and the Philippines, where Chinese tourism increased by over 50 percent between 2012 and 2013.3

    Perhaps more important than the sheer numbers of Chinese citizens traveling abroad is the amount they are spending. In 2012, the U.S. Department of Commerce estimated that Chinese tourists spent an average of $6,000 in the United States, compared with an average of $4,000 for all international tourists. Much of this money is being spent on high-end luxury goods. 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, Chinese tourists spent on average 1,000 euros. Fashion items constituted 87 percent of this spending.4 In the United States, retailers of leading luxury goods in Manhattan and Beverly Hills have added Mandarin-speaking staff to their stores. Propelled by increased tourism, China has emerged a major player in the international luxury-goods market, a trend expected to increase in the future. The brokerage and investment group CLSA (Credit Lyonnais Securities Asia) projects the Chinese share of the market to reach as high as 50 percent by 2020.

    Importantly, China’s outbound tourism is tied to global economic trends. Global tourism rates dropped in 2009 by about 4 percent as a result of the global financial crisis. The Chinese economy picked up quickly after the crisis, and tourism from China continued to expand unfettered. By comparison, international tourism did not rebound until 2010.
    Tourists leave an indelible impact on the places they travel, which can have longstanding consequences for how China is perceived worldwide. In recent years, there have been some notable examples of Chinese tourists misbehaving when abroad. 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 Tourism Administration issues guidelines ahead of major travel holidays reminding Chinese tourists to “be civilized.” The government’s approach reveals a clear desire for Chinese nationals to be perceived positively across the globe, thereby improving China’s international public image.

    It is unclear if the government’s initiative to cultivate this positive image is paying dividends. Over 19 million Chinese tourists visited Hong Kong in 2014, amounting to nearly 69 percent of all foreign tourists into the autonomous territory. However, a University of Hong Kong study found that negative feelings toward mainland Chinese was 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.

    There are over a thousand flights between China and South Korea every single week, and 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

    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 has 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 Chinese National Tourism Administration (CNTA) controls China’s outbound tourism through its 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 2016, the number of countries that have ADS agreements with China has increased to 120.

    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 has actively encouraged Chinese tourists to visit Taiwan since the Kuomintang returned to power in 2008.5 Tourism from Mainland China has been a boon to the island. The number of Chinese tourists has grown from 329,204 in 2008 to 3,987,152 in 2014. Chinese tourists increasingly view Taiwan as a destination for luxury-brand shopping, with Mainlanders spending approximately 60 percent of their travel expenses on shopping. Industry experts fear, however, that inbound tourism from China may be stymied if political tensions intensify.

    Likewise, 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.

    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, and by 2013, Chinese tourists spent over $510 million in the Philippines. 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. “China: Data on Outbound Tourism,” United Nations World Tourism Organization, 2015, accessed December, 2015.
    3. “China: Data on Outbound Tourism,” United Nations World Tourism Organization, 2015, accessed December, 2015.
    4. David L. Shambaugh, China Goes Global: The Partial Power (UK: Oxford University Press, 2013), 255.
    5. Approved Destination Status (ADS) Agreements by Year 1983-2016Ian Rowen, “Tourism as a territorial strategy: The case of China and Taiwan,” Annals of Tourism Research, Vol. 46, May 2014, 64–65.