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Trade war

Chinese travel to US dips for first time in 15 years

Trade war dents one of the most lucrative inflows of money

Chinese travel to the U.S. had grown for a decade and a half, bringing in huge amounts of revenue.   © Reuters

NEW YORK -- Amid the ongoing trade war between Washington and Beijing, Chinese travelers to the U.S. have decreased for the first time since 2003, new government data shows.

Visitors from China numbered roughly 3 million in 2018, according to the U.S. National Travel and Tourism Office. The drop from the year-earlier 3.2 million broke a decade-plus trend of steady growth.

President Donald Trump's efforts to reduce the trade imbalance with China appear to have harmed one of the most lucrative aspects of the bilateral relationship.

"The irony is that travel exports have been the greatest success story of our trade relationship with China, generating a $30 billion surplus and accounting for 19% of all our exports to that country in 2017," said Tori Barnes, executive vice president for public affairs and policy at the U.S. Travel Association, in a statement. "The Chinese visit the U.S. in strong numbers, and they spend an average of $6,700 per trip -- about 50% more than the average international visitor."

U.S. travel exports to China for all purposes, including education, increased more than $1 billion to $36.4 billion last year in the government data.

Adding to the trade tensions, Chinese travelers' concern over safety, stricter security policies and airfare worked against travel to the U.S., tourism research group Destination Analysis said. Japan has overtaken the U.S. as the most-desired international travel destination for Chinese tourists in the group's survey.

With China's economic growth hitting a 28-year-low in 2018, and growth in retail sales of consumer goods missing 10% for the first time since 2003, Chinese travelers likely turned to more affordable trips with cheaper airfares and overall costs.

The Chinese government did little to help. The Chinese Embassy in Washington warned Chinese travelers last July on a variety of issues, including expensive medical bills, shootings, robberies, seizures by customs agents and disasters.

"While our commercial and security relationships with China are certainly complicated, it is an undeniable fact that Chinese travel to the U.S. has been a huge win for the U.S. economy and jobs, and there are warning signs that advantage is beginning to erode," Barnes said.

Still, the depressed visitor numbers might not persist.

"China is one of the fastest-growing sources of outbound travel in the world," said Seth Borko, a senior analyst at Skift Research, to the Nikkei Asian Review. "Chinese citizens took 143 million international trips in 2017, 11.6% of all worldwide departures."

"We expect that in 10 years, by 2029, China will send its citizens on 286 million international trips and account for 15.7% of all departures," Borko said, with many to "closer and cheaper" destinations across Asia. Skift estimates that just 2.2% of Chinese outbound trips were to the U.S. in 2017.

But "in the face of such large and growing numbers, it seems highly likely to us that in the long-term Chinese travel to the U.S. will increase, and grow faster than inbound visitors from many other regions," Borko said.

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