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Chinese overseas tourists give Beijing added diplomatic clout

130 million free-spending travelers carry considerable economic weight

Chinese tourists wearing Korean traditional costumes Hanbok pose for photographs at the Gyeongbok Palace in central Seoul, South Korea in October 2016.   © Reuters

BEIJING -- China boasts the world's largest number of international tourists, with nearly 130 million traveling abroad this year. Their appetite for shopping is happily recognized as nearly insatiable, so most countries welcome them and their free-spending ways.

Beijing has taken notice, and is using the economic clout of its overseas adventurers as a way of flexing its diplomatic muscle. Quietly, and without attracting criticism from abroad, the government selectively imposes bans on overseas travel by groups to countries that may have temporarily fallen out of favor with Beijing.

Simple, effective, and all it takes is a brief verbal instruction.

Quiet, but firm

An employee at a travel agency in Qingdao, Shandong Province revealed Beijing's methods: "My boss received a call from the local Tourism Administration on Dec. 20, telling us to stop selling group tours to South Korea." The Travel Administration she referred to is part of the regional government that administers tourism policy. She says her agency received no written notice.

Recently, travel agencies in Qingdao, Yantai and other cities in Shandong Province, along with those in Beijing, suspended sales of group tours to South Korea. In a Dec. 20 press conference, however, spokesperson Hua Chunying of China's Ministry of Foreign Affairs denied there was a ban. "I haven't heard about it," she said. "China is open to exchange with South Korea."

A former executive of a Chinese travel agency begged to differ."The Chinese government does not make official announcements about what appears to be retaliatory measures against specific nations, which itself would contravene international law," the person said. "But when it's unhappy with another nation, it resorts to back-door political guidance. These are not decisions by local tourism administrations, but more likely guidance from an upper-level organization within the Communist Party."

The former executive continued: "The reasons for each ban on group tours to South Korea is unknown, but judging from the timing -- just after the China-South Korea summit -- it's natural to infer that there was something China was unhappy about."

Regional bans

Beijing often imposes group travel bans only in certain areas. The initial ban on group travel to South Korea was nationwide, triggered by the U.S. deployment in March of its Terminal High-Altitude Area Defense, or THAAD, system in South Korea. It was lifted in November only in Shandong Province and the capital after China and South Korea had somewhat mended relations.

However, the ban was reimposed in December.

Shandong lies across the Yellow Sea from South Korea. Due to its proximity to South Korea and the number of South Korean companies there, business and cultural exchanges between the two are frequent. But with Beijing still unhappy with Seoul, the travel ban was reimposed there and in Beijing -- areas where the government expected to see an increase of tourists headed to South Korea in the run up to the 2018 Winter Olympics.

The ban essentially maximizes the amount of pressure with minimum effort, since it is enforced only in areas with the most expected South Korean-bound tourists.

Sales of group tours to Japan have also been restricted since September in the provinces of Liaoning and Shandong, as well as the city of Chongqing. Beijing claims that Chinese nationals went missing after entering Japan on forged passports and that it is worried about capital controls violations. But an insider thinks otherwise: "This seems to have been triggered by China's dissatisfaction with unofficial, inter-governmental talks with Japan over the summer."

According to another insider, there are logistical reasons for imposing travel bans on a regional basis: "The restrictions were halted in Shanghai and Guangdong Province, since individual travelers outnumber group tourists in those areas. Hence, the ban wouldn't have had very much effect, and controlling group tourists is a hassle to start with."

Soft diplomacy?

China's use of group tour bans as a diplomatic weapon became evident in 2012, when the number of overseas Chinese tourists approached 100 million annually. By restricting Chinese travel, Beijing was able to pressure the Philippines and Japan, both countries with which it has issues regarding territory in the South and East China Seas.

Chinese tourists carry their purchases in Tokyo's upscale Ginza area in 2016.

Although Chinese tourism to Taiwan grew during the pro-China Kuomintang administration under Ma Ying-jeou, the trend reversed as soon as Tsai Ing-wen, who opposes the "One China" principle, took office in 2016.

Over the summer, the number of tourists from China to Taiwan has been increasing. And because tourists from South Korea and Southeast Asian countries are also increasing, Beijing may have changed course, deciding that a ban on travel to Taiwan would not affect the Tsai administration.

Moreover, Chinese President Xi Jinping considers reunification with Taiwan an "inevitable requirement." Thus, some observers think that Beijing has decided that overly restricting travel to Taiwan would be counterproductive, weakening economic ties and hampering reunification efforts. China will likely alter travel policy only when it wants to send a clear message as it pursues reunification.

When China's World Tourism Alliance, an international tourism organization, was established in September, Chairman Duan Qiang stressed that China would shift from a tourist nation to a tourism power.

WTA thinks that developing tourism will improve the world. The vast numbers of Chinese tourists abroad account for some $261 billion in consumption as estimated by the World Tourism Organization -- roughly 20% of international tourism according to Chinese media. The economic power they wield should not be used by Beijing to increase its diplomatic influence, especially at the expense to other countries' tourism industries.

Nikkei staff writer Kensaku Ihara in Taipei contributed to this story.

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