Decades of astonishing economic growth have given China new tools for extending its influence abroad and achieving its political goals. Some of these tools are inducements, including Belt and Road Initiative projects and new development financial institutions.
But China has demonstrated that it will use its new economic leverage in pursuit of political goals unrelated to economic exchange, swiftly shifting inducements to punishments. One example lies in the field of tourism.
Two factors make regulating tourist flows tempting for Chinese policymakers: the size of its international tourism industry and the control China can still exercise over outward tourism. But whether tourism has been an effective political tool is debated.
The largest international tourist sender in the world
China has quickly become the largest international tourist sender country in the world. Over the last two decades, the number of Chinese overseas travellers rose by over 25 times from 5.3 million in 1997 to 130 million in 2017. In the latter year, Chinese tourists contributed an estimated US$250 billion to overseas economies, double the figure for US tourists and triple that of Germany.
The Chinese government has a degree of leverage over its tourists that other governments do not enjoy. Many Chinese tourists are new to international tourism and have limited international language abilities. There is still a strong desire for comfort-zone or group tourism — approximately 38 per cent of outbound Chinese tourists are on group tours. China also has licensing and other forms of formal and informal leverage over tour group operators.
The most rudimentary Chinese lever for rewarding other governments with increased Chinese tourist numbers is to grant countries ‘Approved Destination Status’. This allows group tourism to that country and can increase the number of Chinese tourists by an average of 50 per cent.
Since the Chinese government has stronger regulatory power over tour agencies than most governments, it can also seek to influence foreign behaviour by curtailing such tours.
China’s three largest licensed tourist agencies by revenue are all state-owned and only 8 per cent of its 25,000 licensed travel agencies are authorised to offer international travel. Foreign agencies are not permitted to provide outward bound travel services for Chinese nationals.
Foreign countries struggle to retaliate
There are often far more Chinese tourists going to their country than the other way around, a significant change in recent years. Many of the countries that China has used…