Chinese Visitors Numbers Continue To Decline. Why Geopolitics, Free Market May Be To Blame
Chinese visitors to Hawaii are down 26 percent through the third quarter of 2019. If the trend continues as expected, it will mark four straight years of declines. According to Anu Anwar, a research fellow with the Daniel K. Inouye Asia Pacific Center for Security Studies, the decline could be a form of political punishment from the Chinese government.
“They bring a whole of government to modify the behavior of other countries, if it's not aligned with Beijing’s goals. It could be economic laborers, it could be tourism, it could be many, many other ways,” Anwar said.
About 150 million Chinese citizens traveled abroad in 2018, according to China's Ministry for Culture and Tourism. Their numbers have more than tripled over a 10-year period. They now generate $250 billion in economic worldwide activity each year.
Chinese leaders have realized they can use that as economic leverage. By restricting their citizens' ability to travel to certain locations, Beijing can inflict economic pain on the countries of rival governments.
Examples abound in the past 20 years. Travel to Turkey was limited in 2000, when that country refused to grant passage to a Soviet-era naval ship that the Chinese had purchased from Ukraine. Turkish leaders ultimately relented, and the ship, which became the frame for China’s first aircraft carrier, was allowed through the Bosporus Strait.
In 2018, increased tensions with Taiwan led to the cancellation of hundreds of flights from mainland China. The year before that, annual Chinese visitors to South Korea dropped by 4 million after South Korea allowed the deployment of a U.S. Terminal High Altitude Area Defense anti-missile system.
But when it comes to the U.S., Anwar says China has taken a more subtle approach, likely wary of further escalating the ongoing trade tension. Ruling communist officials have opted for an influence campaign, using state media to make the United States seem like an unfriendly place to travel.
“If you go there, you might be hassled in Customs, so be careful about that. It’s a cautionary notice for their citizens that if you decide to go United States, you have to think twice about your security. So Chinese citizens get discouraged about whether they should go United States or not,” Anwar said, describing the messaging in Chinese media.
But others say the travel figures tell a more complicated story. Reene Ho-Phang, a strategic consultant in Shanghai for the Hawaii Tourism Authority, says no single factor can explain the current situation. She believes market forces and changing preferences are the more likely reasons for the drop in arrivals from China.
Chinese travelers used to book in large tour groups. Now they tend to travel as individuals, much like Westerners, seeking out new destinations for each trip.
They also have more options to choose from. According to Ho-Phang, 15 years ago there were only 20 to 30 government-approved destinations for Chinese citizens, a fraction of what is available today.
“Fast forward, we now have 150 destinations. You know, we are competing not just with other countries, but there are other cities and states,” Ho-Phang said.
Many of those destinations also offer Chinese citizens a free visa-upon-arrival, whereas a U.S. visa will cost them upwards of $200 and requires appearing at an American diplomatic office before traveling.
So is it geopolitics or the free market? Chinese arrivals to Hawaii are have been declining since 2015, well before the U.S.-China current trade dispute. But, nationwide, the decline didn’t start until last year.
So the answer is likely: a little bit of both