China Slides Open Economic And Diplomatic Doors With Visa-Free Travel – Analysis

By Songshan (Sam) Huang

Since the introduction of visa exemptions in late 2023, foreign tourist arrivals in China have surged. China’s visa-free policies include mutual exemptions, unilateral waivers to select nations and a 144-hour visa-free transit policy. These policies not only reduce time and financial costs for travellers, but also enhance the perceived value of a stopover in China.

In the first seven months of 2024, 17.254 million foreign tourists visited the country, marking a staggering 129.9 per cent increase compared to 2023. While these numbers are a positive indicator of China’s reopening and attractiveness as a destination, they also point to broader implications for China and the global community. The spike in inbound tourism could enhance diplomatic relations and foster mutual understanding in an increasingly polarised world.

Increased inbound tourism is a boon for China’s slowing economy. With the World Bank projecting China’s GDP growth at a modest 4.8 per cent for 2024, the country faces the need for structural reforms to sustain its economic trajectory. Attracting international tourist spending on accommodations, dining, transportation and attractions provides a much-needed stimulus. This influx represents a net input into China’s economy, triggering a multiplier effect across the tourism supply chain while generating jobs, particularly for Chinese youth facing high unemployment.

Beyond immediate revenue generation, foreign tourists’ spending can stimulate broader economic dynamism, helping to offset domestic demand shortfalls. But relying on tourism as an economic solution comes with risks. As the global economy remains unpredictable, fluctuations in international travel, geopolitical tensions and potential health crises could all undermine this source of growth. China must approach its tourism strategy with a broader long-term economic vision.

China’s visa-free policies could also be interpreted as a strategic diplomatic tool — what some might call ‘soft power’ or ‘smart diplomacy’. By easing travel barriers, China encourages more visitors to experience the country firsthand, countering negative narratives shaped by Western media. The growing trend of international bloggers and social media influencers showcasing China is invaluable. These influencers, often regarded as more credible and relatable than official marketing campaigns, may have been reshaping global perceptions of China, particularly among younger Western audiences.

Western media often emphasises isolated incidents involving foreign tourists’ safety, such as the stabbing of four US teachers in Northeast China. Social media influencers provide a more authentic view of China’s social realities, sharing firsthand experiences of the country’s cultural heritage, modern lifestyle, impressive transport infrastructure and urban development.

In an era of heightened global polarisation, the role of tourism in fostering people-to-people exchanges cannot be understated. China’s reaffirmation of its open-door policy at the third plenary session of the Chinese Communist Party’s 20th Central Committee in July 2024, highlights the country’s commitment to facilitating cultural diplomacy. Amid rising trade protectionism and geopolitical friction, visa-free travel becomes an extension of China’s broader foreign policy, aligning with initiatives like the Belt and Road Initiative. The hope is that increased intercultural exposure will cultivate understanding, reduce misconceptions and ultimately contribute to global peace and cooperation.

But the potential pitfalls of tourism must also be managed. Overtourism — when tourists overwhelm local infrastructure and resources — is a global concern, with cities like Barcelona offering cautionary tales. China could face similar issues, especially in popular tourist destinations where both inter-regional domestic and foreign tourists strain local resources.

Some Chinese cities are already advising residents to stay home during peak tourism periods to accommodate the influx of visitors. In Chongqing, local residents are urged by the municipal tourism authority to avoid popular tourist attractions during public holidays. Such measures, though pragmatic, can foster resentment among locals who feel displaced in their own communities. Tourists also compete with residents for public services, transportation and access to amenities which may exacerbate social tensions if locals perceive their living standards are compromised.

China must be proactive in balancing the needs of its residents with the benefits brought by foreign tourists. Failure to do so could lead to rising tensions and diminish the potential gains of its visa-free policies. Lessons from around the world indicate that careful urban planning, infrastructure development and equitable resource distribution are critical to avoiding the pitfalls of overtourism.

China’s continuation of its visa-free policies is likely, given the economic and diplomatic advantages. But caution is essential. As the country navigates high unemployment and slower economic growth, the government must carefully manage the distribution of tourism benefits to ensure local communities are not left behind. Tourism should not exacerbate existing social inequalities but rather serve as a catalyst for mutual understanding and shared prosperity.

To sustain the growth of inbound tourism, authorities and operators should continue enhancing travel convenience and quality for foreign tourists. It is also important to regularly review visa-free policies for certain countries, monitor visitor flows and make necessary adjustments. Overseas Chinese represent a significant market for China’s inbound tourism and policymakers could explore strategies beyond visa exemptions to encourage their visits.

While China’s visa exemptions have undoubtedly spurred an influx of foreign tourists and bolstered its economic and diplomatic goals, managing this growth is essential to its sustainability. Balancing the benefits of tourism with the well-being of local residents will be key to maintaining both domestic harmony and China’s global image as a welcoming, open nation.

• About the author: Songshan (Sam) Huang is Professor of Tourism and Services Marketing and Head of the Centre for Tourism Research in the School of Business and Law at Edith Cowan University, Australia.
• Source: This article was published by East Asia Forum