The desperate domestic economic situation has played a part in the Chinese government’s blitz of tourism to countries classified as ‘pro-US’, such as Korea and Japan. China opened the doors of group tours, which had been closed since Corona 19 ( COVID-19 ), sequentially at the beginning of this year and in March, but the target was limited to pro-China countries such as Thailand.
On the 10th, China’s Ministry of Culture and Tourism announced the 3rd list of countries that allow overseas group travel, including 12 Asian countries including Korea, Japan and India, 8 North and Central America countries including the United States and Mexico, and 6 South American countries including Colombia and Peru. 27 European countries, including the UK, Germany and the Netherlands, 7 Oceanian countries, including Australia and Papua New Guinea, and 18 African countries, including Algeria, Tunisia and Mozambique, are also allowed group tours.
Fingerprint collection, which has been pointed out as a major hurdle for Koreans visiting China, will also be exempted until the end of this year. Prior to this, China resumed passenger transportation on West Coast international passenger ships (car ferries) with South Korea, which had been blocked.
The reason why the Chinese government has decided to drastically unblock tourism is because it urgently needs to come up with a solution to the economic situation. The Chinese government is managing its expression about the international community’s concerns over deflation (a situation in which domestic consumption and prices are sluggish for a long time at the same time), saying, “It will only have a short-term aftermath.” China’s July consumer price index ( CPI )
announced the previous day was -0.3 % (compared to the same month last year), turning negative for the first time in two years and five months. Producer Price Index ( PPI )-4.4 %, continuing a negative streak for the 10th month. It is the first time in 28 months that the CPI and PPI both recorded negative figures. The export performance report announced on the 6th is also the worst. In July, exports amounted to US$ 281.7 billion (approximately 370 trillion won), a whopping 14.5% decrease from the same month last year. It is the largest drop in 41 months.
A downturn in the CPI means Chinese consumers are closing their wallets. With the real estate market, another axis of China’s economy, in a long-term slump, it is difficult to expect dollar inflows through trade as exports are sluggish. Here, even consumption is frozen. It is as if the economic engine is turned off completely. This is the background for China to abruptly lift restrictions on tourism to countries classified as pro-American, such as South Korea and Japan, which China has been ignoring.
An official from a domestic company based in China said, “At a time when major economic indicators are heading toward deflation, they seem to be expecting economic revitalization by allowing travel to China even in pro-US countries under the pretext of the Hangzhou Asian Games, Mid-Autumn Festival, and National Day holidays.” “In particular, the exemption from the fingerprint 안전놀이터registration process is probably intended to attract travelers by simplifying the travel process, starting from nearby countries,” he said.
In particular, it is interpreted that the Chinese government’s efforts to encourage its citizens to travel overseas reflect a sense of urgency to shift the central axis of households from ‘saving’ to ‘consumption’. According to the People’s Network, the official newspaper of the Communist Party of China, the savings rate of Chinese people, which was 60.4% in the third quarter of 1995, fell to 39.2% at the end of 2017 as the economy grew rapidly. Then, in the first quarter of 2022, it rose to 45.4%. It means that residents are collecting money instead of spending it amidst anxiety about the future. India, whose economy is growing rapidly and emerging as a global economic rival to China, is said to have a savings rate of around 30 percent. A temperature difference in economic vitality is revealed.
Another official said, “(This measure) is part of an effort to create a more stable international situation so that people can spend with a sense of security in that the domestic economy will revive only when they are encouraged to spend the saved money. “Isn’t it the key to converting savings into consumption?” he said.
In terms of individual industries, there are some areas where the Chinese government can expect short-term profits. Long-distance visas from China to Europe or the US are saturated. Even if you apply now, you will have to wait about 4 months. The need for an increase in international flights was even mentioned at a meeting of the Political Bureau of China. Those who can afford it want long-distance travel, but visas are not issued, and those who can afford it relatively minimize their spending even on domestic travel.
It is an open fact that the Chinese government is providing astronomical subsidies to cover the losses of national airlines. Increasing the number of travelers while allowing group tours to Korea and Japan is expected to increase revenues for national airlines and reduce government subsidy spending.