South East Asian destinations compete vigorously to attract Chinese tourists; Thailand welcomed 11 million Chinese visitors in 2019, and Malaysia 3.1 million. The bigger picture is more complex, transcending visitor numbers and expenditure. Trade and investment ties, strategic politics, diplomacy and tourism are intertwined in complex bilateral relationships.
Partly, this is because China’s government views its tourism interests through a different lens. Across Asia, inbound visitor and domestic tourism spending are key metrics governments use to benchmark their visitor economies. Maximizing annual arrivals – particularly from key markets like China – is considered an intrinsic driver of economic growth, job creation, and securing inbound investment.
By contrast, inbound tourism has derived less utility for China’s government, although boosting the visitor economy is enshrined in the 14th Five-Year Plan (2021-2015). Instead, it leverages the world’s largest outbound market in its foreign policy. Tourism matters because it is the fulcrum of broader-based governmental relations.
President Xi Jinping became the first Chinese leader to quantify tourism output within a foreign policy context in a speech at the Boao Forum for Asia Conference in 2015. “The Chinese economy will bring more opportunities of trade, growth, investment and cooperation for other countries in Asia,’ he said. “In the coming five years, China will import more than US$10 trillion of goods, Chinese investment abroad will exceed US$500 billion, and more than 500 million outbound visits will be made by Chinese tourists.”
The Dragon Awakens
After three years of Covid isolation, China began restoring travel connections with the world on 8 January. It entered the pandemic as the world’s largest outbound market, generating 170 million cross-border trips in 2019. Despite the Covid Zero policy shuttering international travel from March 2020 onwards, the scale of domestic travel meant China comfortably retained its status as the world’s second-largest air market. Consequently, nations across the Asia Pacific hoped a swift unlocking of ‘revenge travel’ demand would bring comparative volumes of Chinese leisure and business visitors as in 2019. Historical revisions of 2023 will conclude those expectations were simply too high.
While the regional tourism sector awaited the return of Chinese tourists, initial air travel was in the reverse direction. During the spring of 2023, a procession of South East Asian leaders arrived in Beijing to meet President Xi Jinping. These included experienced hands, like Singapore’s Prime Minister Lee Hsien Loong, Cambodian Prime Minister Hun Sen and Indonesian President Joko Widodo, plus recently elected Philippine President Ferdinand Marcos Jr and Malaysian Prime Minister Anwar Ibrahim. They shared similar agendas, including regional defense and security, trade and investment, and infrastructure funding. Scaling up air connectivity and tourism were also high priorities.
China’s international travel return reinvigorated the role of tourism for regional growth. The Asian Development Bank noted in April that China’s reopening could “cause a faster-than-expected rebound”. Regional growth was forecast to expand from 4.2% in 2022 to 4.8% in both 2023 and 2024, driven by an upturn in “consumption, tourism and investment.”
Comments