China's new diplomatic lever - hordes of tourists

Taiwan among places that may see plunge in visitor arrivals from China during CNY break

A person takes a photo of the compound of the Hall of Prayer for Good Harvests at the Temple of Heaven in Beijing, China on Jan 17, 2017. PHOTO: EPA

SHANGHAI • With six million Chinese tourists expected to travel abroad over the Chinese New Year - or Spring Festival - break, China's Jan 27 to Feb 2 holiday is crucial for Taiwan tour agency operator Li Chi-yueh, who relies on mainland visitors for a third of his revenue.

But Mr Li's hopes are not high this year, after the number of mainland tourists plummeted 36 per cent since President Tsai Ing-wen took power in May. Though Ms Tsai says Taiwan wants peace with China, Beijing suspects she seeks formal independence.

"China uses its sightseeing tourists as a diplomatic weapon," said Mr Li, owner of Taipei-based Chung Shin Travel Service, who has been representing Taiwan's tour operators to lobby Tsai to improve ties with Beijing.

"There's a lot of concern that the industry won't survive if we carry on like this." The concern is not confined to Taiwan - tour operators and government officials elsewhere in Asia say they fear China is using its increasingly high-spending tourists as a lever to pressure or reward its neighbours.

A government official from South Korea - which has irked China by agreeing to let the United States deploy an anti-missile system - said Chinese and Korean tour companies told him the China National Tourism Administration (CNTA) had instructed Chinese agencies to cut tours to South Korea by at least 20 per cent between November and February.

The official calculated that thousands of potential travellers were lost after eight applications to add charter flights between the countries in January and February were rejected without explanation.

"This is not a win-win situation - it is mutually disadvantageous. But what can we do? As far as defence is concerned, we have no room to compromise," said the official, declining to be named due to the sensitivity of the matter.

Chinese companies told him the measure was designed to cut an excessive number of low-quality, low-priced tours for Chinese tourists visiting South Korea, the official said.

The number of Chinese tourists visiting South Korea inched up 1.8 per cent year on year in November, versus a 70.2 per cent increase in August and a 22.8 per cent rise in September. That was the worst since August 2015, when arrivals slid 32 per cent after a Middle East Respiratory Syndrome outbreak.

In early November, the US said it would deploy the anti-missile system battery in South Korea within eight to 10 months.

China has not said it is seeking to limit tourists to South Korea or Taiwan to express displeasure at political disputes. Earlier this month, when asked about the limiting of charter flights to South Korea over the Chinese New Year, China's Foreign Ministry said it did not understand the details of the situation but that cooperation and exchanges between the two countries needed to "have a basis in public opinion".

For Taiwan, China has said it was natural that Chinese tourists were choosing not to visit Taiwan at a time of political uncertainly.

By contrast, the Philippines and Malaysia are enjoying strong spurts in growth of Chinese tourism as Beijing removes travel warnings and eases visa rules. Both countries have been moving diplomatically closer to Beijing in recent months.

Chinese tourist arrivals between March and December in Malaysia jumped 83 per cent from a year earlier. The number of tourists visiting the Philippines from China rose 40 per cent in the first 10 months of last year compared with 2015.

Chinese tourists are the world's highest overseas spenders. They are expected to spend US$210 billion (S$300 billion) abroad this year, Euromonitor data shows, double the amount Chinese firms spent on overseas mergers and acquisitions last year.

Mainland travel companies Reuters spoke to acknowledged that traveller numbers to some countries were changing, but declined to comment on whether they had received government directives to discourage particular destinations.

"Travellers are voting with their feet. They are choosing to go to the country that will make them happy and avoid the country that might make them feel unwelcome," said Mr Xu Xiaolei, chief brand officer at China Youth Travel Service (CYTS), one of China's top three state-owned travel companies.

"Political and diplomatic matters are also under our consideration, as tourism is part of diplomacy in many ways. But demands of tourists are always the core principle when designing our travel packages."

Translator Mercy Ma plans to visit Cambodia with her family over the Chinese New Year. She had long wanted to visit Taiwan, but was crimped by visa restrictions.

"We had been prepared to go to Taiwan, but then found out that there were quite a bit of restrictions, so we eventually decided against it."


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A version of this article appeared in the print edition of The Straits Times on January 23, 2017, with the headline China's new diplomatic lever - hordes of tourists. Subscribe