Last Friday, the National Bureau of Statistics released its annual communique, a feast for numbers buffs, although likely to cause indigestion if consumed too quickly. Most of the main economic indicators have already been reported, so here we will focus on a few of the newly released figures.
First, tourism, in which China is about to have a major world impact. Visits by foreigners plummeted last year, as did foreign-exchange earnings from tourism, thanks to Sars. Altogether, there were 91 million tourist visits in 2003, of which 80 million were by people from Hong Kong, Macau and Taiwan (down 5 per cent) and 11 million from the rest of the world (down 15 per cent). Foreign exchange earnings from tourism were US$17 billion, a fall of 15 per cent.
But the real story is that foreign tourism to China is about to be dwarfed by Chinese tourism abroad. Even as Sars was scaring away foreigners, Chinese went out in record numbers: there were 20 million trips abroad, of which 15 million were private tourist trips. Total visits increased by 20 per cent, but private tourist trips rose by 47 per cent. Chinese tourism is likely to increase vastly, for the simple reason that this is a handy way for the government to funnel some of its vast stockpile of foreign exchange out of the country. The rapid buildup of foreign exchange reserves last year put heavy pressure on Beijing to revalue the yuan, which it would rather not do. Instead, it is looking for ways to export foreign exchange.
Tourism is an obvious choice for this, since individual deposits account for more than a quarter of China's more than US$400 billion in foreign exchange holdings. Last year, Beijing increased the amount of foreign exchange an individual may carry abroad, from US$2,000 to US$6,000. It also increased the number of nations to which it will permit its citizens to make tourist trips, notably by adding the European Union (with the exception of Britain and Eire, which are negotiating separate agreements likely to take effect this year).
As a result, annual growth of Chinese tourist trips abroad could well average 20-25 per cent for the next several years. By the end of the decade, the number of Chinese tourists overseas will be between 50 and 70 million per year. Chinese tourist spending abroad will likely exceed domestic tourism-related foreign exchange earnings by US$10-20 billion a year.
This will not solve Beijing's currency problem, but it will be an economic boon for many European countries. Like all tourist booms - such as those of the petrodollar-rich Arabs in the 1970s or the Japanese in the 1980s - it is also likely to create resentment. But in the end that will pass and Chinese will become an accepted feature of the international tourist landscape. The optimistic outlook on foreign tourism is tempered considerably by figures showing how far China has to go in improving the lot of the vast majority of its citizens who will never be able to afford a trip abroad.
