For China’s neighbors, incoming Chinese tourists can serve as a valuable cash injection into the local economy, but it often comes with strings attached. A massive and growing Chinese tourism market on the doorstep sounds like an ideal scenario for many distant destinations, but poses a substantial risk as well. Because of its size, China can easily come to represent over 50 percent of all tourist arrivals in neighboring countries, yet because of its opaque decision making processes and track record of using tourism as a foreign policy tool, China’s neighbors are increasingly cautious of letting China dominate their tourism industries.
For China’s developing neighbors, tourism services represent a much larger share of exports than in more developed countries, and Chinese moves to disrupt tourism flows to these countries can cause everything from economic turmoil to political dissent.
At the moment, however, it seems like China’s more developed neighbors in East Asia are the first in the region to actively try to diversify their tourism industries instead of letting Chinese tourists dominate this sector of the economy. Taiwan’s new government has embarked on its “New Southbound Policy”—a move to decrease overall economic dependence on China, including in tourism. The policy seems to have been a success so far, with tourism arrivals breaking a new record in 2016 in spite of dropping arrivals from China. South Korea, much like Taiwan, found itself in China’s crosshairs in the areas of both tourism and cultural exports, leading it to start rolling out a more diversified tourism strategy. Even Hong Kong, the foremost destination for Chinese tourists, provided tourism authorities with capital earmarked for tourism promotion in markets beyond China.
For China, on the other hand, Chinese outbound tourists give China substantial leverage in any negotiations with neighboring countries—and it’s not shy to use it. Here are some examples of how China has used tourism as a foreign policy tool in the past year:
In a display of Beijing’s displeasure with Taiwan’s new independence-leaning government, it quickly limited the number of Chinese group tours to Taiwan. While China hasn’t publicly announced a restriction on Chinese tourism to Taiwan, it’s understood that Chinese tour operators have been “advised” to limit the number of tours to Taiwan. Officially, China simply argues that it’s natural for Chinese tourists to avoid Taiwan during a time of “political uncertainty” and a sense of being “unwelcome”. However, China’s foremost tourism organization, state-owned China International Travel Service, was quick to launch a Chinese government-endorsed Taiwan tour package that excludes destinations that predominantly voted for the independence-leaning Democratic Progressive Party, and instead features destinations in Taiwan where comparably China-friendly Kuomintang won a majority of votes in the last election.
Second to Taiwan, South Korea was perhaps the hardest hit by Chinese efforts to leverage its standing as an outbound tourism powerhouse and a major importer of cultural products. South Korea’s decision to deploy the U.S. THAAD anti-ballistic missile defense system has resulted in substantial blowback from China. Similar to the case of Taiwan, China hasn’t officially announced any retaliatory measures in the areas of culture and tourism, yet the writing is on the wall: K-pop seems to have gotten semi-banned in China, and state media has repeatedly claimed that the THAAD decision will cause Chinese tourists to avoid visiting South Korea. Recent reports out of South Korea indicate that the Korean government may even decide to take the issue to the World Trade Organization for arbitration over the alleged unfair retaliatory measures imposed on South Korea by Beijing.
While China hasn’t targeted tourism to Japan in the last 12 months per se, it has leveraged Chinese tourism’s growing importance to the Japanese economy to strike against companies and destinations in Japan it perceives as treating Chinese people unfairly. Most notably, Chinese media have blasted the Japanese APA hotel group over revisionist history books in hotel rooms for weeks. Chinese tour operators were quickly pressured by the China National Tourism Administration to remove listings of the hotel chain’s properties. Other events highlighted in Chinese media have been examples of Japanese destinations’ many different attempts to teach Chinese visitors manners, often in ways perceived as disrespectful by Chinese nationals.
Even though quiet in the last couple of years, the conflict over the Senkaku Islands (which China claims as its territory) has previously led to anti-Japanese protests in China and boycotts of Japanese products. As the islands are once again entering the spotlight over U.S. Secretary of State Rex Tillerson’s pledge to cover the islands in the defense treaty between Japan and the United States, the question remains if they’ll eventually pose a threat to the boom of Chinese visitors in Japan.
Malaysia, much like the Philippines under Duterte, has actively tried to cozy up to China in the past few years, leading to a substantial boost of Chinese tourists visiting the Southeast Asian country. The growing number of Chinese visitors to Malaysia is a welcome relief among economic and political turmoil surrounding the so-called 1MDB corruption scandal, and a tough few years in Chinese tourism after the MH370 incident. The incident caused significant Chinese backlash against Malaysia Airlines and the Malaysian government’s response to the disappeared aircraft, which carried 153 Chinese nationals.
In another unfortunate incident, a Malaysian tourist boat carrying 28 Chinese tourists sank in eastern Malaysia during the Chinese New Year Golden Week. From the Chinese side, there have been strong pressures to thoroughly investigate the incident, as well as not stopping search-and-rescue efforts until all missing Chinese nationals are found. The response to the incident echoes to the Malaysian investigation and search surrounding MH370 incident in 2014, which China slammed as chaotic.
For Malaysian authorities, reestablishing trust with the Chinese public—and government—after the MH370 incident has been of high priority. With both Chinese investment and tourism in Malaysia booming in 2016 as a result of its efforts cozying up to China, Malaysia is now doing its best to avoid being framed in negative light in China again.
Despite its picturesque beaches, cheap shopping opportunities, and geographic proximity to China, the Philippines has long underperformed in the Chinese tourism market—seeing far from the number of Chinese tourists that for instance Thailand and Vietnam welcome every year. However, the election of President Duterte and his rapprochement with China did not go unnoticed in Beijing. In the months after Duterte was elected, Chinese tourism to the Philippines has reached new heights. According to the Philippines’ National Economic and Development Authority, Chinese visa applications have now reached 1,400 a day, up from 400 a day before the countries got on friendlier terms.
Much like other countries in the region, tensions between China and Vietnam are primarily caused by territorial disputes in the South China Sea, where China and Vietnam have substantial overlapping claims. Back in 2014, riots and protests in Vietnam over a Chinese oil platform in waters claimed by Vietnam led China to issue travel warnings against visits to Vietnam. Tours were subsequently cut, and visitor numbers plummeted. Since then, Chinese tourism to Vietnam has largely recovered, making Vietnam one of the success stories in the region in the last couple of years. However, Vietnamese border officials still refuse to stamp Chinese passports which display the so-called nine-dash lines that circle China’s claims in the South China Sea, instead issuing separate visas. Vietnam’s issues with Chinese passports have also been highly publicized in Chinese media, with one alleged instance of a Vietnamese border guard scribbling profanities inside a passport with the nine-dash line highly publicized in Chinese media. However, friendlier ties and an emphasis on bilateral negotiations in the last couple of years helped boost Chinese tourist numbers in Vietnam to new heights, with Chinese arrivals increasing by over 55 percent in 2016.
For China, outbound tourism can be used as both as a carrot and a stick. In its so-called Belt and Road initiative, improved tourism ties are often highlighted as one of the benefits to partnering nations, whereas in the neighboring region, travel warnings (or threats thereof), negative media attention, and “recommendations” to Chinese tour operators over their itineraries are often used as tools to control Chinese tourism flows to countries in the region. With China becoming the largest and most important tourism market for most countries in the region, it would perhaps be more surprising if China didn’t try to use it to its advantage.