Last week we shared about the great success of the CTW Chinese Tourist Welcome Awards, with 30 awards handed over to the winner during the ITB China Exhibition. We would again like to extend our gratitude to all the applicants – we highly encourage all to participate again next year, to stand a chance to win an award in one of the five categories! It was also a great pleasure to meet the many readers of COTRI WEEKLY in Shanghai.
Many topics were discussed during the ITB China Exhibition and at the China – The Future of Tourism Summit organised by Dragontrail a few days later, and one of the topics that could not be avoided was the trade war and the disappearance of China’s current account surplus.
Just slightly over a decade ago, China’s current account surplus equalled 10% of China’s GDP, but this fell to just 0.4% just last year. Many experts believe that China could be in deficit in 2019 for the first time in more than 20 years. The positive result for goods in 2018 was the lowest in five years, but more importantly it was almost completely evened out by the negative result in services, a main component of which is tourism – with a total of about 250 billion USD. This occurs in light of the continuous growth in outbound tourism while the number of foreign visitors to China is stagnating and are falling in terms of leisure tourism. A comparison of China’s reported tourism deficit with its key trading partners’ reported tourism trade surplus shows that the former is significantly larger than the latter, leading to the conclusion that China’s reported tourism expenditure is possibly not actually entirely calculated from the usual tourism-related means, but that tourism is a source of unrecorded capital outflows instead.
Fears of restrictions for outbound tourism to push up the current-account surplus seem, however, unnecessary for the majority of experts. The Chinese government still has a buffer of 3 trillion USD from foreign-exchange reserves. There have been a number of actions to attract more foreign spending through Chinese online and offline malls, but other than that, the support for outbound tourism as a soft power tool is continuing.
With best wishes for the week,
Wolfgang Georg Arlt and the COTRI WEEKLY Team