BEIJING: China’s tourism industry enjoyed robust growth in 2016 thanks to the central government’s stimulating policies and innovative financial practices in the industry, like mergers and acquisitions, experts told the Global Times on Tuesday. However, given that there is still a $100 billion deficit between revenues generated by outbound and inbound travel, experts pointed out some headwinds in the sector, such as the lack of qualified services and a potential tax increase following the value-added tax (VAT) reform. In 2016, domestic tourism revenue jumped 13.6 percent to 4.69 trillion yuan ($680 billion), the People’s Daily reported on Monday, citing information released at a national tourism conference in Central China’s Hunan Province. Based on estimates by the World Tourism Organization, the tourism industry contributed to 11 percent of China’s GDP in 2016, and was responsible for 10.26 percent of the country’s social employment, equal to the world’s average.
Domestic tourists made 4.44 billion trips last year, up 11 percent year-on-year, according to statistics released by the China National Tourism Administration on January 9. “The knock-out number signals that China’s tourism industry has embarked on a new era,” Xia Jiechang, academic advisor at the Tourism Research Institute of the Chinese Academy of Social Science (CASS), said at a forum for the release of the academy’s tourism industry report in Beijing on Tuesday. As China’s economic structure is strategically upgrading, especially in the real economy, the tourism industry has become an important engine of economic growth and an underpinning for local employment, Song Ding, a Shenzhen-based market analyst from the China Development Institute, told the Global Times on Tuesday. “That’s why the Chinese government stepped up efforts to boost the industry last year,” Song explained. The State Council, China’s cabinet, issued dozens of guidelines in 2016 for the tourism industry, according to the CASS’ report, including the building of local “characteristic town,” which also meets the government agenda for a “new type of urbanization.”
In addition to favorable policy support, the exploration of new financial models concerning mergers and acquisitions in 2016 was also critical in elevating the competitiveness of China’s tourism industry, experts noted. For example, China International Travel Service merged with China National Travel Service (HK) Group in August, in a bid to “consolidate their position as the industry’s leader and increase market share,” Jin Zhun, the secretary-general of the Tourism Research Institute of CASS, said at the forum. The Chinese government expects tourism revenue to reach 7 trillion yuan by 2020. According to China’s 13th Five-Year Plan (2016-20), the tourism industry will account for more than 12 percent of GDP in 2020.
