Inbound International Tourism To China: A Panel Data Analysis

The State Council of the People's Republic of China issued "Several proposals to speed up the development of the tourism industry from the State Council" On December 1, 2009. These proposals established the strategic position for the tourism industry, which will be cultivated into the mainstay industry of the national economy and the modern service industry that people get more satisfied with. China is rich in tourism resources. After 30 years of reform and opening-up, China has taken the historic step to become one of top tourist countries in the world and at the same time set the great goal of becoming a super power in terms of the tourism industry. Particularly, the inbound tourism industry has experienced such phases as emerging, sudden rise, and rapid progress. Now it is in process of developing steadily and prosperously. In 2009, the tourism industry of China generally continued to grow fast and steadily. But the number of inbound tourists was 126 million person-time, which decreased by 2.7%. So the drop of the inbound tourism, which had appeared since 2008, was still going on. We should adjust the international market development strategy in time to stop the decline in inbound tourism. As a result, it is necessary to study the factors which affect China's inbound tourism industry as well as the relationship between the influencing factors and the industry. Putting forward corresponding solutions to the current decline in inbound tourism is also imperative.This article is based on the existing research conducted by scholars from home and abroad. Firstly, it presents a descriptive analysis of the current status of China's inbound tourism. The number of inbound tourists was 1.8 million in the year of 1978. With 30 years of development, the number goes through changes from rapid growth, steady growth, to the decline phase and finally reaches 126.4759 million. It is obvious that both the June 4 incident in 1989 and the outbreak of SARS in 2003 had significant negative impact on the increase of the number of the inbound tourists to China. This phenomenon demonstrates that the inbound tourism industry is highly sensitive to the tourist environment. The global rank of the number of inbound tourists has increased from the 41st in 1978 to the 4th at present. Among the inbound tourists to China, the male-female ratio is 1.79:1; about 78% are tourists from Hong Kong and Macau, who travel mainly for leisure, meeting or business purposes and are mostly aged from 25 to 64. Among the foreigners who come to travel in China, Asians make up 59.82% of the total population, and this percentage for Japanese and Koreans is up to 30.45%. Thus, it can be concluded that the cost of transportation and cultural differences are two important factors influencing the potential tourists' choice of destination. Secondly, by analysis of the basis of the tourism demand theory, this article finds out the specific demand and supply attributes of the tourism as a commodity, which are restricted not only by individual factors but also by many other factors such as social, economic, and political factors. This article makes it clear that the demand of the inbound tourism is affected by: (1) the economic ability of potential tourists, the cost of the tour, the trade activities, and the economic and cultural exchanges; (2) whether or not the demand of potential tourists is coupled with the competitivity of the destination in the international market and the attraction of the tourism commodities, as well as such factors as the government's tourism policy, stability, safety, and etc.; (3) the effects of emergency incidents and the natural environment.Under the guidance of the tourism demand theory, this article studies the influencing factors of the tourism demand in two parts. Part 1 studies the influence of people's income level and number of outbound tourists in the tourist source countries, cost of transportation, exchange rate, relative growth rate of CPI, as well as emergency incidents on the number of inbound tourists to China, according to the data of the inbound tourists from the main tourist source countries from 1997 to 2007, as well as the data of the inbound tourists from Hong Kong and Macau from 2000 to 2008. The following conclusions are drawn from the study: (1) GDP per capita of the tourist source country is a significant factor, which plays a key role in the increase of the number of China's inbound tourists, and this conclusion indicates that the high national income of a country promotes the international tourism development; (2) the increase in the number of outbound tourists from the tourist source countries significantly influences the the number of inbound tourists to China, and specifically, as the number of outbound tourists from the main tourist source countries increases by 1%, the number of inbound tourists to China will increases by 0.177%. Part 2 uses monthly data to analyze the influence of seasonal factors and emergency incidents on the number of inbound tourists to China. In this part, time series analysis methods have been adopted to study the variation principle of the number of inbound tourists. The following conclusions are drawn: (1) there are declines in the number of inbound tourists to China in 2003, 2008 and 2009, which indicates that the inbound tourism industry is sensitive to the shock of emergency incidents and natural disasters; (2) the number of inbound tourists from other countries is seasonally differentiated, and for most tourist source countries, January, February and June are low seasons to travel in China, and March, April, as well as October are high seasons; as for the Asian countries and regions, August, November and December are high tourism seasons as well.