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Haiyan Song on mass tourism in China and the future of U.S.-China travel

Photograph of Haiyan SongProfessor Haiyan Song has a strong background in Economics. His major research areas include tourism economics with a particular focus on tourism demand modelling and forecasting as well as tourism forecasting using big data. He was educated both in China and the UK and has extensive research and consultancy experiences in areas such as foreign direct investment (FDI) in China and economic issues related to China’s tourism sector. Over the years, Professor Song has been involved in a number of projects on tourism demand forecasting in the Asia Pacific region. He has also spoken frequently, as an invited speaker and presenter of research papers, at various international conferences on issues related to tourism impact assessment and forecasting. He spoke to Bryn Miller CMC '19 on April 12, 2017.

Photograph and bio courtesy of Dr. Song.

Could you give a brief background of the history of mass tourism in China? When did the country open up to a large number of foreigners, and why?

China’s mass tourism, especially domestic tourism, started in the early 1980s just after China’s economic reform. Chinese citizens, especially those from the coastal areas where more rapid economic development occurred, were able to travel within China due to these reforms. Such travel was initially mostly business travel. At that time few were able to travel for leisure or pleasure -- it was relatively rare due to the low income levels of Chinese consumers at the beginning of the period of economic reform. 

When China opened to the outside world, trade with other countries increased significantly. There was a lot of business travel, initially outbound. With the increase of personal disposable income from the economic development in the late 1990s and early 2000s, there was a significant increase of outbound tourists travelling from China to other nations in the Asia-Pacific and also to Europe and America. However, not every Chinese person could travel to Europe and the United States in this period due to visa restrictions. Over the last decade, the visa restrictions have lifted in many of the developed countries, so Chinese citizens can travel freely to most of these nations.

Inbound tourism to China also picked up just after the opening of China in the late 1970s and early 1980s. Initially, inbound travel was led by business travel because of the growing trade between China and other nations; later, this transitioned to include inbound leisure travel to China. The number has been growing over the last 30 years and reached 140 million visitors in 2016.

Which countries send the large numbers of tourists to China? 

South Korea sends the most tourists to China in terms of the number of purely foreign visitors, but you must also consider Hong Kong. Politically, Hong Kong is part of China, but administratively, it is considered a foreign economic region. Most Chinese tourists need to apply for visas to visit Hong Kong and vice versa. There’s still that border control--there isn’t a free flow of people. The Chinese do consider Hong Kong a foreign territory in terms of tourism. If you classify Hong Kong as a foreign tourist market, it actually sends the most tourists to China. Last year, Hong Kong residents traveled to China 80 million times. There are only 8 million people living in Hong Kong, which means that every Hong Kong citizen traveled to China 10 times a year on average. 

How have the increasing rates of inbound tourism from foreign countries impacted the Chinese economy?

Foreign tourists have helped Chinese economic development considerably. Two types of tourists are relevant here: business travelers and leisure travelers. Business travelers stay mainly in the cities and bring business to China, while leisure travelers often go to remote areas with a lot of natural beauty in less-developed regions. Foreign travelers go to these areas, such as Western Yunnan in Western China, or Shaanxi, which is also a relatively poor province in in the Northwest of China. These underdeveloped areas attract a lot of tourists, which helps their economic development. It has helped considerably in terms of the economic development in rural areas, but of course tourism also contributes to the economic development of coastal, urban regions as well. 

We’ve talked about tourism impacting the economy. Given that you’re an expert on China in transition, I’m curious about this impact of the transition going the other way as well. Has the Chinese transition to a more market-based society and development of the economy impacted tourism?

The Chinese economic growth has been impressive over the last 30 years--it has been, on average, between 7 and 11 percent per year, which is remarkable when you realize that other countries and regions have only 2 or 3 percent growth per year. China, most years, is growing in the double digits. This growth has expanded the size of the middle class. In urban areas, half of the population is considered middle class. That is a main driving force in tourism development. As we know, once your economic status reaches a certain level you start thinking of travel, whether in China or abroad. The increased income of consumers has encouraged travel within China. As a result, Chinese outbound travel has increased very quickly over the last 10 to 20 years. The annual growth of outbound travel is also more than 10 to 15 percent per year, which is a remarkable growth. The neighboring countries and regions like Hong Kong, Macau, Taiwan, Japan, and Korea have very much benefited from this outbound tourism to their land. In many regions, they depend on the Chinese tourists. For example, Hong Kong receives about 40 million mainland Chinese tourists every year, which contributes about 3 percent of Hong Kong’s GDP — about 160 billion Hong Kong dollars of income.

How has mass tourism affected the flow of foreign direct investment?

Tourism development needs a lot of infrastructure, and also the management systems and knowledge in terms of how to run and manage tourism in China. As a result, there‘s a lot of foreign companies, especially travel-related companies, invested in China and that has helped China to develop its leisure tourism infrastructure. 

With respect to inbound foreign tourism travel to China for business purposes, without such travel, business in China would probably not be running as effectively as it is now. This business travel helped China’s international business to grow, and as a result there’s a lot of foreign investment flowing into China. I don’t have the exact figure in terms of how much FDI has been realized as a direct result of tourism, but I’m sure there is a significant amount.

Moving away from economic topics, what has been the environmental impact of tourism in China?

There have been cases in some regions where the environment has been negatively affected due to the large number of tourists traveling to the region. This occurs when the carrying capacity has been exceeded--the number of tourists traveling there is too great. This leads to a negative environmental impact, seen in air pollution from cars and buses and airplanes, and also the waste generated by large amounts of tourists. The infrastructure has not been able to cope with such a large number of people. There have been some negative impact on the environment, especially in some rural areas.

China has already recognized this problem, especially over the last five to ten years. They already started to think about how to develop tourism in this area in a sustainable manner. A lot of policies have been developed and implemented to control the tourism flow to certain areas or enhance the carrying capacity of these areas to reduce the negative impact. Especially at the early stages of tourism development in these regions there were huge problems, but now the Chinese and local governments have recognized the issue and have developed and implemented policies to reduce the pressure on the environment.

On the global stage right now, sustainable tourism is getting a lot of attention. For example, the United Nations designated 2017 the “Year of Sustainable Tourism.” Is sustainable development a high priority of the Chinese government?

Absolutely. China has been trying to collaborate with United Nations World Tourism Organization and implement some of the UNWTO’s recommendations and suggestions to sustainably develop tourism in China. It’s a top priority on the government’s agenda. The government also has raised a general awareness in the public of the importance of sustainable development in China. It’s an emerging and important policy.

To touch upon a different issue, what has been the cultural impact of foreign mass tourism in China? 

In terms of cultural heritage in China, the number of foreign tourists is relatively small compared to the number of domestic tourists. Although I mentioned that 130 to 140 million foreigners visit China annually, only about 40 million are pure international tourists — so not from Hong Kong and Macau. These numbers are still small, considering China is such a huge country with a population of 1.3 billion. Therefore, the foreign tourists have not had a major impact on the cultural environment. Rather, this tourism has helped China to preserve its cultural heritage to showcase it to foreigners.

When Americans and other foreign tourists visit China, what general attitude do the Chinese have towards these visitors?

Foreign tourists are always welcome and are very well taken care of. The general attitude of the public is positive towards foreign tourists especially because China does depend on inbound tourists to develop the economy in certain areas.

Due to the large number of South Korean and American tourists coming into the country, has there been a stronger emphasis on English and Korean in school?

Yes. English, Japanese, and Korean are probably the most widely spoken languages in China, especially in the tourism industry. If you’re dealing with foreign tourists, you’re required to be able to communicate. There’s a lot of emphasis on the language abilities of tourism industry employees. The level of English of tourism professionals is pretty good--it’s probably much better than their level of Korean and Japanese. 

2016 was designated the “U.S.-China Year of Tourism”, according to President Xi Jinping. What motivated the two countries to promote tourism? 

There are three main motivations. First, there’s the economic relationship between the two countries. It has been very strong over the last 20 years. We are the two largest trading partners in the world. As a result, there’s a lot of business and leisure travel between the two nations, especially after the lifting of visa restrictions a couple years ago so Chinese citizens can apply for ten-year visas. They can visit the U.S. freely within the ten years the visa covers, which is a big help for those tourists to travel to America. Using this tourism to develop the economic relationship between the two countries is the most important motivation.

The second motivation has to do with geopolitics. The political power of China also has been growing not only in the Asia-Pacific but also worldwide. Of course, the United States is still dominant in terms of political influence, but America has also seen China emerge as a superpower. Politically, it is necessary for these two superpowers to be friendly partners so that world peace can be maintained between the two and their neighboring nations. Tourism is a way to promote this friendly partnership.

The third motivation came from the citizens themselves. There’s a lot of U.S citizens that want to visit China to understand the country and its culture and heritage more. For the Chinese, since their economic development has led to an increase in income, they have the means to travel abroad and want to go to the United States, a free country with a well-developed economy and natural beauty. This drove the 2016 tourism initiative as well. 

Now 2016 is over and America has a new president with different stances on China. How do you see this tourism relationship developing in the coming years?

I don’t know, to be honest. Donald Trump has a lot of new policies he wants to implement, and according to the media, the talk between President Xi Jinping and Trump appeared to be positive. Based on the outcome of this talk, we can guess that in the future the relationship between the two countries could be maintained. I don’t think there will be a drastic change with respect to the economic relationship. Neither nation can afford to lose each other, since the trade is too great between the two. If China lost the U.S. as a trading partner, economic growth would drop by at least three to five percent. The same is true for the U.S. — its economy would suffer too. 

There are some power struggles between American and China in the Asia-Pacific region currently, and we’ll have to see how those play out over the coming months. Economically, the tourism development between the two nations should continue to grow, but there is the possibility of the political conflicts between the United States and China and other countries within Asia escalating to a point which may actually pose some risk to travel between the U.S. and China. The number of tourists may be reduced, in this scenario. I believe that the U.S. and China will further negotiate on how to resolve the issues we see in Asia, and I hope that the political relationship will not worsen to the point where bilateral tourism cannot continue to grow. 

Author: 
Bryn Miller