China – Soft power tourism post COVID
The reemergence of outbound Chinese international tourism post COVID-19 has been notably cautious. There are apparently residual concerns within the Chinese government about the possibility of a resurgence of the virus and the risks from particular international destinations. China has consequently been opening itself up slowly to the world and incrementally allowing Chinese citizens to travel domestically and internationally.
Current decisions around outbound Chinese tourism are being made within the context of a challenging economic and international environment for China. Ongoing trade tensions with the US and other trading partners are creating a drag on China’s economy and dulling its usual growth trajectory. The Chinese government has responded with policies designed to stimulate the domestic economy and stabilize areas of risk.
As part of this policy position, it appears that China may also be increasingly seeking to use outbound Chinese tourism as an economic and political tool. As Tse (2013) notes, this projection of China’s soft power is not a new concept in China’s arsenal of diplomatic tools. China however, might currently see stronger rationale for such direct measures in its efforts to protect its interests domestically and abroad.
Chinese outbound tourism as an economic tool
From an economic perspective, the government of China may seek to use outbound Chinese tourism as a means to stimulate the domestic economy. Given the headwinds the Chinese economy is currently facing, Beijing may see advantage in encouraging Chinese tourists to spend their tourist Renminbi within China rather than elsewhere. The size of the prize is not insignificant with the Chinese Ministry of Culture and Tourism estimating that outbound Chinese tourists spent around US $255 Billion in 2019.
Supporting the Chinese domestic tourism industry?
Such an injection of consumption into the domestic Chinese economy could be seen as a logical offset to the slump in international tourists visiting China since 2020. Estimates vary, but China may be currently receiving between 20-30% of the approximately 145 million international tourists it welcomed in 2019[i]. While there is optimism in China regarding a rebound in the second half of 2023, the actual numbers will become apparent in the normally busy months from July to October (2023)
Stimulating the Chinese economy more broadly?
It is also likely that the Chinese government is considering the broader economic impact of outbound Chinese tourists. Honggang et al (2020) note the net detrimental value of outbound Chinese tourist to China’s economy. As well as the direct impact of Chinese tourist spend being taken out of the domestic economy, this research highlights the limited return to China from the associated economic activity. China may be viewing outbound tourists more narrowly as a zero sum loss to the economy.
Supporting Chinese international investments
Further, the government of China may be seeking to more strategically utilise the outbound Chinese tourist spend in support of its international investments. This could include countries where China has a significant investment footprint through Belt and Road Initiatives (BRI) or other agreements. These destinations could directly benefit from the arrival of Mainland Chinese tourists (i.e. tourist related infrastructure), or indirectly through the general boost this provides to their local economy.
Chinese outbound tourism as soft power (political)
From a political perspective, China may also seek to use outbound tourists as a stronger foreign policy tool. China could be becoming sharper about the countries it is choosing as an ‘approved destination’ and those that it is not. Ooi (2016), Chen et al (2026), all suggest Chinese use of so called ‘soft power’ is not a new concept nor is the use of outbound Chinese tourists as a means to exercise it. The question is the extent to which Beijing is now seeking to use outbound tourism as a tool and if this a reflects a shift from soft to hard power.
China's approved destination list
The current approved destination list provides a useful reference around how China is viewing countries on and off the list. The twenty countries identified as ‘approved destinations’ in 2023 were as follows: Cambodia, Indonesia, Laos, Malaysia, Maldives, Philippines, Singapore, Sri Lanka, Thailand, New Zealand, Fiji. United Arab Emirates, Egypt, Kenya, South Africa, Russia, Switzerland, Hungary, Cuba and Argentina.
On one hand, the selection of destination countries could simply be a reflection of China’s often cited cautious post COVID re-opening and the extent of damage to the travel industry. Beijing is naturally reticent to expose China to new health risks and the international travel industry is clearly still recovering. Are Beijing policymakers just choosing the safest and readily proven destinations?
If this was the case however, the list of approved destinations would be considerably longer and include EU, North American, and other destinations. There are clearly a number of countries not on the list that have adequately managed COVID and currently present low risk to Chinese tourists. The tourism industry in many of these destinations has rebounded rapidly in most cases and could manage an increase in inbound Chinese tourists.
A list that reflected genuine Chinese consumer demand would also likely look very similar to the top twenty Chinese travel destinations pre-COVID. A 2022 World Tourism Alliance (WTA) report notes the enduring interest by Chinese tourists in many of the popular pre-COVID international destinations. Many of these countries are now noticeably absent from the approved destination list.
The question then becomes, what is driving the Chinese governments approved destination list and what does this tell us?
Analysis of the approved destinations
A rudimentary analysis of the approved destination countries highlights the probable political/strategic decision making behind their selection. All twenty selected countries currently have a generally stable and positive bi-lateral relationship with China. Nineteen countries are signatories and/or recipients of China’s Belt and Road Initiative (BRI), and with the exception of the Philippines, none have any notable areas of geo-strategic tension.
The approved destinations reflecting Chinese projection of soft power
The twenty approved destination countries provide insight on China’s view looking out and where China perceives value in exercising soft power through outbound Chinese tourism. Interestingly, Honggang et al (2020) note that Chinese soft power is more likely be effective in Southeast Asian, Asia-Pacific, African and South American countries [than in Western countries], which is where all but five of the approved destination countries are located (the exceptions being Hungary, Switzerland, Russia, Cuba, UAE).
Honggang et al (2020) further opines that it is not a country’s attractions that determine its status as an ‘approved destination’ but the outcomes for China based upon its economic power and agenda setting. While understanding the complex conditions that may be driving Chinese decision making is extremely challenging – they could (simplistically) be broken down into: (1) China’s need to generally exert renewed influence upon the destination country, and (2) the protection of Chinese investment in the destination country.
China using approved destination status to exert influence
The rationale for China seeking ongoing or renewed ‘influence’ with a specific destination country could be for a myriad of reasons. There could be a strong cultural, familial connections, the presence of a large Chinese diaspora, or other similar reasons. At the bi-lateral level, the country may offer political, military, technological, resources, or other attractions for China.
China using approved destination status to protect its investments
In terms of ‘investment protection’ the rationale may be more obvious. China may have significant ongoing investment in the destination country through the Belt and Road Initiative (BRI) and/or other bi-lateral investments. China may simply want to ensure the success of the specific BRI investment and/or the economic stability of the countries and their investments. The indebtedness of some recipients of BRI will concern China.
US-China tension as an additional lens for approved destination status
The challenges however China is currently facing internationally, and specifically its tension with the US – provide another lens for the rationale behind the nomination of approved destinations. In an increasingly polarised world, China may see another means to support allies, cultivate new alliances, and where this is not possible, foster ‘non-alignment’ from countries.
Reviewing the approved destination list
The approved list of countries can be contrasted in the first instance to the countries that are not on the list. A number of ASEAN nations are on the list but not Vietnam with whom China currently has escalating tension in the two countries South China seas dispute. China may also perceive Vietnam is making too much headway in its efforts to forge independent foreign policy as Vu (2023) notes.
New Zealand is on the list but not Australia, which likely reflects of the latter’s strong alliance with the US, involvement in AUKUS, the Quad and the general tension within the bi-lateral relationship. This is despite Australia’s strong trade relationship with China, popularity with Chinese tourists, and the rapid re-emergence of viable Australian tourist infrastructure.
Switzerland who has a positive long-term bi-lateral relationship with China is on the approved destination list. This contrasts to the fact that no EU destinations are on the list with the exception of Hungary who currently has close relations with China. Hungary/China trade in 2022 was around $10 Billion and Hungary has taken a divergent policy position to the EU with regard to issues such as Huawei, China’s human rights record, and the war in the Ukraine. China likely views Hungary as one of its few friends in Europe.
The US, UK, Canada are all not on the list despite the popularity of these destinations for Chinese tourists. This is a predictable position for China to take given current tensions with these Western countries in a number of areas. This contrasts to Russia and Cuba who are strong strategic partners for China and who are on the list.
Egypt and South Africa are both on the list and are countries that China has recently deepened ties and investment. Egypt has been developing a close relationship with China and is the recipient of BRI and other investment activities. Egypt’s economy has continued to struggle in 2023 and China’s may have concerns around its substantial investments there. South Africa’s relationship with China is now as a ‘Strategic Comprehensive Partner’ and it has received considerable Chinese investment over the last decade.
The exclusion of other Central and South American destinations is curious but may reflect the current priority of Argentina to China. Here China likely sees Argentina as an essential part of its policy in the Americas, has an interest in Argentinian resources (such as Lithium), and perceives opportunities for Argentina to be included within the BRIC group.
As well as being a key investor in the Maldives, China is also currently competing with India for Maldives alignment due to its strategic location. China will see multiple reasons to allow outbound Chinese tourists to visit the Maldives.
See Table 1.0 for high level analysis of approved destination countries.
Summary
The Chinese government may see value in utilising the significant numbers and high value of Chinese outbound tourists for targeted policy objectives. This may include: to support the Chinese domestic tourist industry; stimulate the Chinese economy more generally; support Chinese economic interests internationally; exert influence over approved destination countries for a wide range of political and economic reasons; and reward and punish countries for bi-lateral tensions and/or perceived alignment vis a vis the US/West. Broad knowledge of the rationale for Chinese policies around outbound Chinese tourist will help countries plan accordingly and manage the impact.
Recommendations for countries not on China’s approved country list:
Better understand the political dimension behind China’s decision. Recognise that the Chinese government may be making decisions around approved destination status based upon international relations and its own strategic goals. Chinese tourists have a notably different level of autonomy around destination choice than other countries. Seek to better understand what the Chinese government’s perspective of your country is based upon and whether this is a something that is likely to change. This may determine your decision to expend resources towards Chinese tourists or not.
Be ready for a change in Chinese government policy. International relations can evolve rapidly as can policies, personalities and a range of other factors. Plan for the possibility that the Chinese government changes its policies so that you can take advantage of this.
Pivot away from China – Do not expect Chinese tourists to necessarily return in the same numbers that they historically did. International relations between China and a number of countries have entered an increasingly fraught era and this will not change quickly. Recognise that the government of China may be utilising the approved destination status to favour some destinations and exclude others. Spend marketing budgets on attracting more tourists from existing or new source countries. If there are still independent Chinese tourists coming to your country, better understand their needs and target this sub-group thoughtfully.
Recommendations for countries that are on Chinas approved country list:
Better understand the political dimension behind China’s decision. Recognise that the Chinese government may be making decisions around approved destination status based upon international relations and its own strategic goals. Seek to better understand what the Chinese government’s perspective of your country is based upon and whether this is a something that is likely to change. This may determine your decision to expend resources towards Chinese tourists or not.
Maximise the benefits of inbound Chinese tourism. The use of an approved destination list for outbound Chinese tourist will benefit some countries and they should maximise the return from this. Given the volatility of these decisions however, it would also be prudent to not put all ‘eggs in one basket’ and neglect other sources of inbound tourists.
Be ready for a change in Chinese government policy. International relations can evolve rapidly as can policies, personalities and a range of other factors. Plan for the possibility that the Chinese government changes its policies unfavourably towards your country. Be ready to pivot away from China if policies were to change.
References:
Aaron Tham, Xiaoyu (Nancy) Zhang, Wendy Spinks, Liang Wang. (2022) Chinese Outbound Tourists and Daigou as Soft Power. Journal of China Tourism Research 18:6, pages 1143-1163.
Bell, Corey Lee; Collinson, Elena (2022) https://thediplomat.com/2022/12/australia-china-relations-the-outlook-for-2023/
Chen, Y. W., & Duggan, N. (2016). Soft power and tourism: A study of Chinese outbound tourism to Africa.
Chinese Ministry of Culture and Tourism. Various secondary sources.
Council on Foreign Relations. (2021). China’s Belt and Road Initiative – who’s in and who’s out.
https://www.cfr.org/blog/countries-chinas-belt-and-road-initiative-whos-and-whos-out
Gbadamosi, Nosmot (2023). https://foreignpolicy.com/2023/01/18/china-egypt-diplomacy-economy-qin-shoukry/
Honggang Xu, Ke Wang & Young Mi Song (2020) Chinese outbound tourism and soft power,
Journal of Policy Research in Tourism, Leisure and Events, 12:1, 34-49, DOI: 10.1080/19407963.2018.1505105
Lazarus, Leland (2023). https://thediplomat.com/2023/02/china-is-banking-on-argentinas-future-glory/
Ooi, C. S. (2016). Soft power, tourism. Encyclopedia of tourism, 1-2.
The Economist. https://www.economist.com/china/2023/05/24/hungary-is-becoming-more-important-to-china
Tse, T. S. (2013). Chinese outbound tourism as a form of diplomacy. Tourism Planning & Development, 10(2), 149-158.
Vu, Khang (2023). https://thediplomat.com/2023/04/the-china-factor-in-vietnams-multidirectional-foreign-policy/
Zhenhua Gu, Xiang Gao, Sunghan Ryu. (2022) Public diplomacy as a determinant of bilateral tourism between the influencer and influencee countries: evidence from the Asia-Pacific region. Asia Pacific Journal of Tourism Research 27:3, pages 319-330.
[i] According to Chinese government Ministry of Culture and Tourism data – China had around 145 Million tourists in 2019; 27.5 million in 2020; and 32 million in 2021.
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