Inbound tourism is strategically important for China's economic growth

Editor's note: Matteo Giovannini, a special commentator on current affairs for CGTN, is a finance professional at the Industrial and Commercial Bank of China and a member of the Global Young Leaders Dialogue. The article reflects the author's views, and not necessarily those of CGTN.

China, a nation that is widely known for being the world's oldest continuous civilization, as well as for a rich diversity of landscapes, with the world's tallest mountain and the world's highest and largest plateau, has recently rolled out measures targeted to make the experience of visiting the country more attractive to global travelers.

Starting from March 14, China implemented a visa-free policy for citizens of Switzerland, Ireland, Hungary, Austria, Belgium, and Luxembourg, who are now able to visit the world's second-largest economy for up to 15 days for business, tourism, family visits and transit purposes.

Such decisions once again confirm that China's opening-up policy is not a captivating slogan, but a concrete effort aimed on the one hand at progressively opening the door of its domestic market to the rest of the world and on the other hand, at simplifying the entire journey to China by shortening the preparation time. The announced visa-free policies can also be seen as instrumental in boosting the level of foreign investment, and in promoting economic integration with major European countries. 

In Beijing's quest for economic rejuvenation, a strategic shift has emerged, placing emphasis on two key engines: expanding domestic demand and fostering foreign investment and inbound tourism. This shift signifies a departure from traditional growth models reliant on exports and heavy industry, towards a more balanced and sustainable approach to economic development.

Expanding domestic demand is a prudent move for China, especially amidst a global economic landscape marked by uncertainty and volatility. By encouraging consumption within its own borders, China aims to insulate itself from external shocks while fostering a more resilient and self-sustaining economy. This strategy not only bolsters short-term growth but also lays the groundwork for long-term stability by reducing reliance on export-driven growth.

Furthermore, by prioritizing foreign investment and inbound tourism, China seeks to leverage its unique strengths and attract capital and visitors from around the world. Foreign investment injects much-needed capital into the economy, stimulates innovation, and creates job opportunities for local residents. Meanwhile, inbound tourism not only boosts revenue in the hospitality and service sectors but also promotes cultural exchanges and soft power projection on the global stage.

While the Chinese government is devoted to welcoming overseas tourists to travel to the country, ending major barriers through streamlining visa and customs policies, additional problems remain unsolved.

One of the critical challenges facing foreign travelers in China remains the complexity of domestic payment systems, which drastically limit their consumption potential. This is because people in European and American countries usually use bank cards to pay while China's digital payment systems such as AliPay and WeChat Pay, and mobility apps for taking a taxi such as Didi are primarily designed for Chinese users.

In July of last year, Alipay and WeChat launched the service of linking foreign bank cards of Visa and Mastercard to their apps, opening a "convenient door" for travelers to pay in China. This has made it a whole lot easier for international travelers to visit China, offering the opportunity to make transactions in a near-cashless society where more than 80 percent of the transactions for daily consumption take place on mobile platforms.

However, problems persist as foreign visitors, after entering China, face difficulties such as complicated procedures for purchasing tickets for scenic spots.

To encourage app developers to expand their service scope and simplify procedures for scenic spots, China should consider implementing several macro-policy measures.

Firstly, the government might contemplate offering incentives such as tax breaks, subsidies, or grants to app developers who expand their services to cover more scenic spots and simplify procedures. In this sense, financial support could help offset the costs associated with development and implementation.

Besides, a simplification in regulations and procedures for app developers could lower barriers to entry and encourage innovation in the tourism sector. Clear guidelines and standardized processes could be an effective solution to expedite the development and deployment of apps for scenic spots.

Furthermore, collaborations between the government and private sector stakeholders could facilitate the creation of comprehensive tourism apps. Through public-private partnerships, the government could provide resources and infrastructure support while leveraging the expertise and creativity of app developers.

Moreover, a promotion of partnerships with international app developers and tourism organizations could bring fresh perspectives and innovative solutions to the Chinese tourism market. Cross-border collaborations would help address the needs of overseas tourists and enhance the quality of services provided by app developers.

As expanding domestic demand and encouraging foreign investment and inbound tourism have become China's engines to stimulate short-term growth, the implementation of targeted measures could foster a more vibrant and competitive tourism industry that better serves the needs of overseas tourists while driving economic growth and development.

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