Wednesday, May 17, 2006

China Watch 2: China's Tourism

China is not only the world's 2nd largest economy in terms of GDP size (by PPP valuation) today. It is also the world's 2nd largest source of foreign tourists. And in the perspective of advancing free market, this is a good development. Why?

The Chinese's increasing wealth, tourism, business travels, and even migration, will spur more private enterprise development and expansion in the rest of the world. You buy cheap products from China, you sell it elsewhere at a good margin, or you use it as raw materials or intermediate inputs in your manufacturing processes, sell at a good price, you make money. Rich Chinese engaged in exports and trading also visit your country, spend their money there, the hotels, restaurants, tourist spots, tour guides and travel agencies, airlines/shipping lines/bus lines in your country are happy.

When tens of millions of Chinese (including Chinese politicians and government bureaucrats) are able to travel abroad and see the culture and economies of other countries, more and more of them will realize the value of people mobility, the beauty of individual liberty, and the efficiency of assigning more personal responsibility, away from centralized and state responsibilities and high taxation.

See related news below.

Chinese travel is taking off
By Howard W. French
The New York Times, MAY 16, 2006

...In 1995, only 4.5 million Chinese traveled overseas. By 2005, that figure had increased to 31 million, and if expectations for future growth are met or approached, even this gargantuan growth will be quickly dwarfed. Both Chinese and international travel industry experts forecast that at least 50 million Chinese tourists will travel overseas annually by 2010 and 100 million by 2020.

In 2004, the last year for which there is complete information, 61.7 million Americans traveled abroad...

The last nation to burst on the world travel scene with similar speed and force was Japan, which was enjoying an explosion of prosperity in the 1980s. Suddenly, Japanese could be seen everywhere, especially groups of middle-aged tourists wearing caps and brandishing the latest camera gear, and led, inevitably, by a Japanese tour guide hoisting a flag so that people would not get lost... roughly 17 million overseas visits.

As recently as the late 1980s, all but the Chinese elite were expressly forbidden from traveling overseas. But by 2003, China's overseas travelers had already surpassed Japan's, placing it squarely among the world's leading travel nations....

The six most popular destinations for the Chinese are Japan, Vietnam, South Korea, Russia, Thailand and the United States. Patterns that took years to develop during the Japanese wave are already falling into place in many of these countries, with hotels, restaurants, airports and shops beginning to cater to their needs with special Chinese language services, bank ATMs and menus oriented toward Chinese tastes...

* See also: China Watch 1: World's Largest Economies, Population, 2005, April 20, 2006

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