China is running the world’s largest tourism deficit. How can it plug the gap?

Chinese tourist traffic to the world is growing but not the other way round. To decrease its deficit in trade in services and improve the world’s understanding of the nation, China must develop new ways to enhance visitors’ experiences

Wang Huiyao

Published: 11:00am, 22 Jan 2020

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This is set to be another record-breaking year for Chinese tourism. Come Lunar New Year, Chinese tourists are expected to take 7 million outbound trips during the extended holiday, which would exceed the 6.31 million trips made in the Spring Festival period last year.

In 2020, outbound trips could pass the 100 million mark for the first time. In 2018, that figure grew by 15 per cent, to 83 million (excluding trips to Hong Kong, Macau and Taiwan). Overall, the Chinese are now taking more overseas trips and spending more money than tourists from any other country.

In contrast, China’s inbound tourism growth has been less impressive. In 2018, foreign tourists made 30.5 million trips to China. That is barely one-third of France’s visitor tally that year, and also slightly less than Japan’s and Thailand’s tallies.

The yawning gap between China’s outbound and inbound tourism has left the country with a tourism deficit of 52.5 million trips in 2018, up by more than 20 per cent year on year. China is running the largest tourism deficit in the world, which accounts for a major chunk of the country’s US$258 billion deficit in trade in services in 2018.

On the one hand, this growing gap is cause for celebration. It reflects the growing number of Chinese who have the means to travel abroad. However, it also raises the question: why is it that China, for all its abundance of natural and cultural wonders, continues to punch below its weight when it comes to attracting foreign tourists?

There is no simple answer – a myriad of factors shape international tourism flows. China now boasts impressive hard infrastructure, including scores of new airports and a high-speed rail network that transports visitors to most destinations across the country within a day. However, the country’s “soft infrastructure” is a different story.

A recent study by the Centre for China and Globalisation and Trip.com sheds light on some of the constraints on inbound tourism growth, as well as steps to overcome them. These include new ways to promote China as an attractive tourist destination, improve entry procedures, and to enhance visitors’ experience once they arrive.

How Chinese tourists have changed over the past decade

First, product development and branding could be improved. Despite China’s ascent on the international stage, many of its tourism gems remain relatively unknown abroad. Drawing on China’s rich landscape of modern and traditional culture, more compelling products could be created that give a taste of China’s regional diversity – and of attractions beyond the Great Wall and the Bund.

There are also opportunities to align China with the growing demand for “experience tourism”, such as offering tailored products that allow visitors to connect with local people through art, cooking and other pursuits.

Once a potential visitor chooses to come to China, their next step is to secure an entry permit. The survey found that this was the No 1 source of problems, with 57 per cent of respondents reporting visa issues. Common complaints were that visa processes were lengthy, costly or complex.

While the processes have been streamlined since the creation of the National Immigration Administration in 2018, there is still room for improvement. For example, new measures such as e-visas and visa exemptions could be trialled and implemented. In addition, the visa-free transit scheme for several cities could be expanded to include more areas.

Once visitors reach China, the most frequently cited issues include language problems, food safety, air pollution and internet access. While many of these are linked to long-term developmental problems that cannot be solved overnight, for some issues, targeted measures could enhance the experience of visiting China.

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For example, given the importance of digital services in modern tourism, relevant agencies could explore ways to resolve issues facing foreign visitors with regard to electronic payments, preferred search engines and social media. For example, five-star hotels could offer portals with access to international social media.

This would not only enhance visitors’ experience, but also amplify the effect of positive communication on inbound tourism, by allowing tourists to instantly show a different side of China to friends and family back home.

The study also underscores that, ultimately, tourism is a service industry, and improving the quality of services offered is at the heart of improving visitor experience. To this end, China should invest in the training of industry practitioners and explore ways to cultivate professionalism and internationalisation in the industry.

Along with continued investment in the relevant infrastructure, the above-mentioned measures could go a long way towards unlocking China’s potential and closing its tourism deficit. And there are good reasons to do so.

Not only would this boost local economies, including in some of the least developed parts of China, it would also help more people around the world connect with China and understand the country better: in the survey, a whopping 82 per cent of visitors said their trip had completely changed their impression of China.

In an age when misperceptions of the Middle Kingdom abound, there is every reason to attract more visitors to China and show more people around the world what this storied land has to offer.

Wang Huiyao is the founder of the Centre for China and Globalisation, a Beijing-based non-governmental think tank

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