China’s Latest Problem: People Don’t Want to Go There
As geopolitical tensions rise, fewer visitors are traveling to the world’s No. 2 economy, widening the East-West divide
Aug. 3, 2023 The Wall Street Journal
Half a year after China lifted Covid-19 restrictions and reopened its borders, few international travelers are coming—another sign of decoupling between China and the West that could have negative repercussions for a long time.
Foreign travelers’ absence is particularly evident in major cities like Beijing and Shanghai, where the numbers of foreigners who visited in the first half of the year totaled less than a quarter of comparable figures in 2019, before the Covid pandemic.
Nationwide, just 52,000 people arrived to mainland China from overseas on trips organized by travel agencies during the first quarter, the latest period for which national data is available, compared with 3.7 million in the first quarter of 2019. As in past years, nearly half of the visitors came from the self-ruled island of Taiwan and the Chinese territories of Hong Kong and Macau, rather than farther-away places like the U.S. or Europe.
“The number of visitors from Europe, America, Japan and Korea are all dropping, substantially,” said Xiao Qianhui, a director with the semiofficial China Tourism Association in a speech in May.
Fewer tourists and businesspeople from overseas means fewer opportunities for foreigners to see China with their own eyes and interact with locals, an important factor in reducing geopolitical tensions, experts say.
The dearth of visitors could also be contributing to less investment in China. Foreign direct investment into the country fell to $20 billion in the first quarter, compared with $100 billion in last year’s first quarter, according to an analysis of government figures by Mark Witzke at Rhodium Group, a research firm.
The drop in foreign investment and arrivals comes as China’s economy stagnates, with a depressed housing market, youth unemployment at record highs and widening fears the country could be slipping into deflation. The Chinese economy barely grew in the second quarter from the first three months of the year.
A shortage of available flights to China is partly to blame for the low arrival numbers, with carriers not yet restoring the same level of service they offered pre-Covid. But Chinese and overseas tourism experts say foreign visitors are also staying away because of deteriorating relations between China and the West, which has made them more wary of visiting.
In June, the U.S. government issued a travel advisory warning Americans to reconsider travel to mainland China due to what it called “the arbitrary enforcement of local laws,” including exit bans and the possibility of wrongful detentions.
Matt Kelly, a Boston-based business consultant, said he has fond memories of his trip 15 years ago cycling around Guilin, a picturesque hilly city in southern China. He visited China two more times, but said he had no interest in going back today.
“Would I go back to that China I knew? Yes!” he said. But now, “China does seem to portray itself as very anti-Western, anti-American, specifically. It makes me very uneasy.”
Friendly Planet Travel, a Pennsylvania-based boutique operator, used to send as many as 1,500 tourists to China a year. Since Covid, it hasn’t had a single request, said Peggy Goldman, its founder and president.
When her team researched the destinations people are searching for online, “China is really at the bottom of that tracking,” she said. “There was a lot of animosity around the subject of China.”
The company has yet to put its China packages back online, although Goldman said she believes China will become popular again eventually.
Leisure travel from North America to China in the first half of 2023 was about 40% of the same period of 2019, according to Mondee Holdings, a travel technology company based in Austin. Mondee sold about half a million flights from North America to China in 2019 through travel agents and other intermediaries, roughly one-fifth of all air travel from North America to China that year.
Although business executives are still making inquiries about traveling to China, many now are focusing on risks, whereas in the past, they wanted to find out how to expedite a visa, said Dan Harris, a partner in Seattle at Harris Bricken, a law firm that advises on investments in China.
“Companies are very, very concerned about their people going to China. Why wouldn’t they be?” he said, pointing to news of China’s recent investigations into Western due-diligence and other firms, which included government raids on global consultancies including Bain & Co. “People are not going to China unless they have to.”
Harris, who used to go to China frequently for work in Beijing, with stops for beer and seafood in Qingdao, said he has told some executives their risks would be low. But he has himself stopped going, after becoming vocally critical of the Chinese government in recent years.
China’s Ministry of Culture and Tourism didn’t respond to a request for comment.
Chinese officials have held meetings with business associations from the U.S., Europe and Japan recently to reassure them the country still welcomes foreign investment.
China’s ambassador to the U.S., Xie Feng, said at the Aspen Security Forum in July that tourists of both countries should visit each other. He suggested hosting a tourism forum and increasing the number of flights, and called on Washington to adjust its travel advisory.
The absence of foreign visitors won’t hurt China the same way it would places like Thailand or Iceland, whose economies rely heavily on tourists. Chinese travelers are now spending more on domestic tourism than they did in 2019.
Still, there are many businesses in China that do count on visitors. The lack of them represents a lost opportunity for China to show itself in a more positive light to foreigners.
Central China’s Zhangjiajie National Park, a region of striking rock formations where the “floating mountains” in the movie Avatar were filmed, recorded only 25,600 overseas visitors through mid-May, compared with 500,000 in the first five months of 2019.
Snow Yu, a Shanghai tourist guide, used to do a thriving business showing foreigners around, including acting as a guide for executives of the Golden State Warriors and Georgia Tech’s Yellow Jackets basketball team in 2017. During the pandemic, when borders were largely closed, he took a temporary job tutoring English.
Yu has returned to his old job, leading mostly local tour groups. But they don’t need his English skills and give fewer tips. As a result, he says his income is down by nearly half from before the pandemic.
“The world needs to be connected,” he said, adding that English-speaking visitors from neighboring countries are beginning to come back.
The drop in visitors from the West and parts of East Asia has been offset in part by an increase in the number of Russians arriving, though Chinese travel experts say they spend less.
In June, when Zhangjiajie, the national park, invited more than 80 international tourism agents to town, a majority came from Russia. Local officials promised to add more flights from China’s northern neighbor or extend existing flights from other Chinese cities.
In his speech, Xiao, the tourism official, appealed for more support from the central government. He stressed that inbound tourism could help defuse geopolitical tensions “in ways similar to ‘ping pong diplomacy,’” referring to exchanges of table-tennis players in the 1970s that helped thaw relations between China and the U.S.
He cited a recent China visit by Elon Musk’s mother, who posted positive messages about her experience on Instagram.
Another group that is steering clear of China is expatriates, who in previous years acted as bridges between Chinese society and their respective home countries. Many invited family and friends to visit.
Investment consultant Alexander Sirakov, 37, moved back to his home country Bulgaria from Shanghai last August. He said that most people in his wider circle of expatriate friends also departed, including eight out of the 10 expat families living in his compound.
“People now perceive China as very distant and somewhat alienated,” he said. “It was exactly the opposite four years ago, when China was really open and vibrant, a must-go place.”
Liyan Qi contributed to this article.
Write to Wenxin Fan at wenxin.fan@wsj.com
Copyright ©2023 Dow Jones & Company, Inc. All Rights Reserved. 87990cbe856818d5eddac44c7b1cdeb8
Appeared in the August 4, 2023, print edition as 'Foreigner Travelers Grow Scarce in China'.