The future of Southeast Asian tourism
China's rise obviously creates economic challenges for Southeast Asia. But will the benefits - and the opportunities, if seized - outweigh these costs? A large portion of the foreign investment that used to go to the Asean region is now attracted to the world's most populous nation, which is seen as a huge potential market and low-cost export base.
Last year, China drew more than US$50 billion in foreign direct investment while only around US$20 billion went to Southeast Asia. In the early 1990s, it was the latter that took the lion's share.
China is also competing with Southeast Asian exporters by taking a bigger share of global markets. And latest figures show that the Association of Southeast Asian Nations' imports from China are growing faster that its exports to China - a trend likely to be intensified by the proposed free-trade agreement between them.
Still, Southeast Asia runs a large trade surplus with China. The region exported goods worth more than US$47 billion to China last year, while importing Chinese items worth less than US$31 billion. And bilateral trade continues to burgeon, providing sales openings for both sides. It is expected to reach US$100 billion this year, up from just over US$78 billion last year.
China may be sucking in raw materials from Asean to feed its voracious appetite for energy, timber and primary commodities like rubber and palm oil. It may also be forcing an array of Southeast Asian industries to restructure, often by cutting costs and jobs. But to some extent at least, any pain will be offset as China's own foreign direct investment in the region - already amounting to well over US$1 billion - continues to increase, creating new growth and employment locally.
The growing number of Chinese business and tourist travellers visiting Southeast Asia is also having a beneficial impact. The World Tourism Organisation forecasts that by 2020, mainland China will send 100 million tourists overseas, making it the world's fourth-biggest source of travellers after Germany, Japan and the United States.
Last year, the number of Chinese leaving the mainland rose 21 per cent, to just over 20 million, surpassing the number of Japanese tourists - previously Asia's most avid travellers - for the first time. This year, the figure is expected to rise to 24 million.
In 1988, Thailand was the only tourist destination that mainland citizens could visit, apart from Hong Kong and Macau. Today, well over 50 countries are on China's approved group tour list, while mainland business travellers and individuals able to obtain visas go to many more places.
Hong Kong and Macau remain the top destinations for mainland tourists, accounting for nearly three-quarters of those jetting out last year. Thailand, Singapore, Vietnam and South Korea each received more than 500,000 visitors from mainland China last year, although the numbers going to Thailand have fallen in the past few years because of reports that Chinese on cheap tours have been badly treated.
Meanwhile, Chinese currently comprise the fourth-largest group of foreign tourists in Malaysia. In a move to entice more visitors from China, Vietnam announced in September that it would allow them to travel country-wide, instead of restricting them to its northern region.
The expansion of air travel to and from China is a key to the outbound tourism boom. Singapore, for example, now has scheduled air links to Beijing, Shanghai and 15 other cities in China. Eight China- or Singapore-based airlines operate more than 140 weekly passenger services between the two countries. Of Singapore's 17 city links with China, five have been added so far this year.
Michael Richardson is a visiting senior research fellow at the Institute of Southeast Asian Studies in Singapore. This is a personal comment
