China’s salvo at Taiwan’s economy may or may not hit home, but a travel curb is just the start

Beijing’s ban on solo travel visas to Taiwan is aimed at hurting the island’s economy and in turn damaging President Tsai Ing-wen’s re-election bid
Taiwanese voters are being pushed to decide which is more important: politics or economics

Chiu-Ti Jansen

Published: 9:30am, 6 Aug 2019

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Is China’s ban on solo travellers to Taiwan part of a plan to “interfere” with the island’s upcoming presidential and legislative elections? For incumbent Taiwanese President Tsai Ing-wen, how will the travel ban play into her narrative of a bullying China?

With its abrupt, terse announcement on July 31, China’s Ministry of Culture and Tourism lit a political firestorm in Taiwan. In response, Li Mingli, the spokeswoman of Tsai’s independence-leaning Democratic Progressive Party (DPP), said that cross-strait tourism should not fall victim to the old trick of “coercing politics by economic means”.

“They [mainlanders] should be allowed to join more and more travellers from around the world in experiencing a country where freedom, openness & tolerance are the order of the day,” tweeted Taiwanese Foreign Minister Joseph Wu, adding: “What’s to fear?”

Beijing’s move is meant to impair Taiwan’s economy, said a China Daily editorial, putting the blame squarely on the DPP and adding that voters should think hard about “whether it is worthwhile to continue to be bound with a secessionist ‘leader’ on the same ghost ship for another four years”.

Hu Xijin, editor in chief of Global Times, another Beijing government mouthpiece, wrote that Tsai's government has “trampled on cross-strait relations for a considerable time, constantly strengthening its opposition stance against the mainland, and actively acted as a bargaining chip for the United States to suppress mainland China”. Hu asked: “Should tourism be a weapon? On the surface of it, it shouldn’t be. By no means had China ever publicly imposed ‘tourism sanctions’.”

This is the first time that Beijing has targeted independent travellers to Taiwan. Since Tsai took office in 2016, mainland tourist numbers have declined from a peak of 4.18 million in 2015 to 2.7 million in 2018 – which the industry attributes to China’s informal sanctions reducing group tours.

China remains the largest source of visitors to Taiwan, accounting for 24 per cent last year, but this is down from 40 per cent during Kuomintang president Ma Ying-jeou’s term, when cross-strait relations were more cordial.

In recent months, Tsai and her DPP cohorts have seized on the supposed “red” infiltration of Chinese influences for political currency, passing five controversial amendments to Taiwan’s National Security Law, with plans to mandate the registration of mainland Chinese agents in Taiwan.

Some observers wonder whether the travel ban is meant to protect Chinese citizens from spying accusations, as well as exposure to information on Taiwan’s election processes and Hong Kong’s escalating anti-government protests.

Would a sharp decline in mainland visitors spell woe for the Taiwanese economy? It depends on who you ask. The DPP government and its supporters cite statistics showing that Southeast Asia has been making up the shortfall since Beijing unofficially discouraged travel to Taiwan in 2016.

The number of Southeast Asian tourists, who have enjoyed visa waivers to Taiwan since 2016, has risen for three consecutive years, surging 32 per cent last year to 2.43 million. However, the average Southeast Asian visitor stays for 4.12 days and spends US$802 per trip, compared to 8.6 days and US$2,300 for the average mainland visitor. This means the surge in Southeast Asian arrivals still leaves an estimated consumption shortfall of US$963 million annually.

Beijing is using Chinese tourists to inflict economic pain – but does it work?

Also, the Taiwan Tourism Development Association expects about 700,000 fewer Chinese tourists in the next six months, spelling a loss of US$1.61 billion or roughly 0.27 per cent of Taiwan’s gross domestic product last year. KGI Securities sees Taiwan’s GDP dropping by 0.2 percentage points.

Tsai faced similar pressure from Beijing, albeit on a smaller scale, at her last election. This time, there is a protracted trade war between the United States and China to consider, as well as US arms sales and Chinese military exercises in waters near Taiwan.

Riding the wave of the global US-led anti-China campaign, Tsai is likely to step up China-bashing, the centrepiece of her re-election strategy. Earlier this year, she won the “Spicy Taiwanese Sister” sobriquet when she slammed Chinese President Xi Jinping’s “one country, two systems” overture. Her outspoken support of pro-democracy Hong Kong protesters has also boosted her popularity.

Kaohsiung mayor Han Kuo-yu, the Kuomintang presidential nominee challenging Tsai’s re-election bid, has also criticised China’s travel ban as unhelpful to cross-strait exchanges and development. Han, who famously advocated “goods flow out, people flow in, and Kaohsiung becomes rich” during his mayoral campaign last year, also urged the DPP government to address the situation and refrain from slapping “red hats” on cross-strait exchanges.

As long as the DPP pushes the “red scare” as a hot-button issue, I expect Han and his Kuomintang comrades to maintain a delicate distance from Beijing, despite advocating closer business and political ties. In fact, the Kuomintang has called for Beijing to “not restrict private exchanges due to short-term changes in political conditions, thus affecting the long-term and stable development of cross-strait relations”.

Now more than ever, Hong Kong is key to Taiwan unification

The success of China’s scare tactics in Tsai’s re-election bid will depend on Hong Kong, and whether Taipei mayor Ko Wen-Je — the election wild card — and former Foxconn chief Terry Gou — rumoured to be considering contesting as an independent — would join hands to split the vote. Singly or together, the two would also work hard to steer voters away from Tsai.

As China Daily observed, the travel ban “may be just the first of a series of moves”. Taiwanese voters will need to decide which is more important: the economy or their ideology.

Chiu-Ti Jansen, with advanced degrees from Yale and Columbia, is the founder of multimedia platform China Happenings and a former corporate partner of international law firm Sidley Austin

Correction: An earlier version of the article stated that the number of Southeast Asian tourists in Taiwan was roughly two-fifths of mainland Chinese tourist numbers. This is incorrect. The error was introduced during editing.

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