China to Become Second Largest Tourism Economy within the Decade

ChinaWatch Logo

China Watch Home

About China Watch

As China’s tourism industry flourishes, the country is poised to become the world’s second largest travel and tourism economy after the United States by 2015, according to a new report from the World Travel & Tourism Council (WTTC). Released in Beijing on April 24, the study, China, China Hong Kong and China Macau SAR: The Impact of Travel & Tourism on Jobs and the Economy, projects average annual growth in the nation’s industry of 8.7 percent from 2007–2016.

In 2006, total travel and tourism demand in China, including consumption, capital investments, government spending, and exports, is expected to grow by 14 percent, to 2,770 billion RMB (US $354 billion). Spending by international visitors to China is projected to reach 588.2 billion RMB ($75.1 billion) by the end of the year, accounting for 7.4 percent of all Chinese exports.

Directly, the sector is expected to contribute 2.9 percent to China’s gross domestic product (GDP) in 2006, reports WTTC. (If indirect contributions are included, the share could be as high as 13.7 percent.) And industry employment this year is projected to reach 17.4 million (2.3 percent of total employment), or as much as 77.6 million (10 percent of the total) if indirect employment generated from the spillover effects of investments and government spending is included.

Tourism has become the new growth area for China’s economy in recent years. According to 2005 WTTC research, the country’s travel and tourism demand now accounts for 4.3 percent of the global market share. The so-called “holiday economy”—a term referring to China’s unprecedented economic growth and rise in disposable incomes—has contributed to a significant increase in domestic tourism. Over the last five years, more than 200 million Chinese traveled during the country’s three annual weeklong holidays—national day, international labor day, and spring festival—collectively spending more than 70 billion RMB (US$8.7 billion).

But the rapid rise in tourism demand is causing some concern. Domestic experts have suggested canceling these three “golden week” holidays, saying the nationwide breaks have brought chaos to the tourism industry. Staff at the most popular attractions now consider the huge, seasonal influxes of tourists “emergency situations,” taking weeks to recover from the onslaught. Meanwhile, there is concern that mass visitation jeopardizes the natural environment and decreases service quality at key sites. WTTC has recommended that China give workers an additional two weeks of paid vacation to help spread out the domestic tourism season and provide for a more stable and sustainable year-long industry.

On a global scale, the growth in international tourism arrivals now significantly outpaces GDP growth, making tourism one of the world’s fastest growing industries. According to estimates from the World Tourism Organization and the International Monetary Fund, tourism grew at an average annual rate of 4.6 percent between 1975 and 2000, while GDP growth averaged only 3.5 percent.