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2019 China Tourism Facts & Figures

2019 china tourism statistics, china inbound tourism in 2019, top 10 source countries of 2019 china inbound tourism, statistics of beijing inbound tourism in 2019, statistics of shanghai inbound tourism in 2019, china outbound tourism 2019,  top china outbound tourism destinations in 2019, top 15 source cities of china outbound tourism in 2019.

Shanghai, Beijing, Guangzhou, Chengdu, Chongqing, Tianjin, Nanjing, Kunming, Wuhan, Shenzhen, Xi'an, Hangzhou, Zhengzhou, Changsha, Guiyang  

China Tourism Statistics during Chinese New Year in 2019

Outlook for China tourism in 2022: Trends to watch in uncertain times

Although Chinese consumer confidence is growing, desire for travel has shown a faltering recovery due to sporadic COVID-19 outbreaks. A predictable pattern is emerging where desire for travel recovers roughly two months after a decline and even though international travel is restricted, the desire for travel remains. Furthermore, travelers’ preferences are shifting, with implications for travel companies.

This article updates findings of McKinsey’s Survey of Chinese Tourist Attitudes and compares the results across the five surveys taken in April 2020, May 2020, August 2020, January 2021, and October 2021. It also examines the implications of shifting attitudes toward travel and offers actions that travel companies may consider when planning for the year ahead.

Consumer confidence is growing but desire for travel shows a pattern of spikes and dips

Confidence in China’s recovery is growing—consumer confidence is now at the highest level since the start of the pandemic. In February 2020, consumer confidence was at 43 percent. In October 2021, 67 percent of respondents indicated that they believe the Chinese economy will recover within two to three months (Exhibit 1). 1 McKinsey’s COVID-19 China Consumer Pulse Survey, see “ Survey: Chinese consumer sentiment during the coronavirus crisis ,” McKinsey, December 3, 2021.

As confidence grows, consumer spending is also showing signs of recovery. The latest Survey of Chinese Tourist Attitudes indicates that the majority of respondents, 77 percent of households, expect their income to stay constant in the near future and essential spending and discretionary spending have both increased since March 2021 and are stabilizing.

When it comes to travel sentiment, desire for travel has spiked and dipped as COVID-19 outbreaks continue. Previous McKinsey research indicated that the resurgence of domestic travel would support China’s travel industry recovery. 2 For more, see “ China’s uneven travel recovery: Long road to international travel furthers domestic opportunities ,” McKinsey, August 30, 2021. But, with recent sporadic outbreaks, confidence in domestic travel has been affected. For instance, in October 2021, only 2 percent of people planned to travel in the next two months. But comparing the results of the five tourist attitude surveys, it appears that COVID-19 outbreaks suppress travel desire for up to two months. The good news is that confidence in domestic travel safety quickly rebounds, showing a predictable pattern of recovery (Exhibit 2 and 3). 3 “Survey of Chinese Tourist Attitudes,” McKinsey, April 2020, May 2020, August 2020, January 2021, and October 2021.

Travel patterns echo the fluctuations in travel aspiration. The number of airline passengers increased by 61 percent between August and September 2021, then increased by 8 percent in October, followed by a decrease of 45 percent between October and November. Similarly, the number of rail passengers showed a 47 percent increase, a 9 percent increase, and a 42 percent decrease in the same months. 4 CEIC data: China Passenger Carried, Civil Aviation; and China Passenger Carried, Railway. But despite the fluctuations, the sentiment survey shows that the desire for travel remains. Currently, 42 percent of respondents plan to travel domestically for their next leisure trip, 26 percent of these involve flights of more than three hours of travel time.

International travel remains attractive, but recovery seems to be still a long way off

Chinese travelers express a desire to travel, both domestically and abroad. Even though international travel is restricted and the majority of respondents still perceive international travel as unsafe—and are not planning international travel in the near term—the survey shows continued strong interest in international destinations. Desire for overseas travel has rebounded to pre-pandemic levels with APAC being the top choice (24 percent). Southeast Asia, Europe, Russia, and Japan are named as the most desired overseas destinations.

Various factors affect willingness to travel internationally. As China’s policy announcements continue to delay any international opening, outbound leisure travel will likely be slow to return. To travel internationally, the Chinese consumer wants to see close to zero COVID-19 cases in the destination country (86 percent rated this as a top 3 factor). As the world adjusts to endemic COVID-19 with outbreaks of new variants, this scenario may be unlikely in the near future. Recently it looked as if Hong Kong might be the next destination to open, given its low COVID-19 cases, however, the traffic impact is difficult to predict and the recent outbreaks add an extra layer of complexity to the border reopening. The second most important factor for Chinese travelers is the removal of quarantine in China upon return (84 percent).

Travel patterns to Macau illustrate how COVID19 cases and quarantine requirements have an immediate impact on travel. When the COVID-19 situation stabilized, with no new local breakouts in Macau and no quarantine required for tourists from low-risk areas, the number of tourists recovered to 50 percent of pre-pandemic levels. During a period of COVID-19 outbreaks in Macau in late September and early October 2021, roughly 1,000 tourists traveled to Macau a day. During October, this number reached 20,000 a day and peaked at 30,500 in a single day in late October. 5 Macau Government Tourism Office, Press releases, October 23, 2021, October 29, 2021, November 1, 2021.

The latest findings have implications for travel companies, particularly around product, channel, and loyalty

Even during the current travel restrictions, there are shifts in traveler preferences and behaviors which may endure. Consumers and travelers are adapting to circumstances, and confidence in domestic travel safety tends to rebound quickly after sporadic outbreaks. As international travel is still restricted, domestic travel has revived, albeit in spikes and dips. There are strategies that travel companies could consider in this new landscape, including how they approach product, channel, and loyalty.

Develop travel products to match consumers’ travel aspirations

New domestic travel products have already been developed to substitute for overseas travel. As consumers’ travel aspirations change, companies could consider ways to match product offerings to current desires. The latest wave of the survey shows that travelers are looking forward to visiting new attractions, but due to travel policies, nearly half of respondents said a short trip to a new site is their number one choice. A short-haul trip to see a new attraction is top of mind (49 percent), followed by a long-haul trip to explore a new destination. For revisits, respondents favor longer trips to more interesting sites over shorter trips (Exhibit 4).

Consequently, travelers are planning trips around their hometown cities as a first choice. This preference provides opportunities for tourism companies to attract in-city demand by providing experiences in line with what travelers are looking to do during these trips.

In terms of expectations around what travelers wish to experience on their leisure trips, interest in visiting cultural or historical sites has increased from 39 percent to 44 percent and is now the second most favored activity. This has surpassed beach and resort trips, although these still remain popular. Shopping and “foodie” trips which featured as categories of interest in previous surveys no longer rate in the top five. Outdoor scenic destinations remain the most popular (Exhibit 5).

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Even as people favor trips in their local cities and nearby areas, they are seeking more sophistication and satisfaction beyond buying something new or experiencing new cuisine. Emotional satisfaction is becoming increasingly important. This is in line with the pre-COVID-19 trend of moving away from functional travel, to experiential travel, and ultimately to transformational travel. In other words, travelers wish to learn something new or have a transformative personal experience during their leisure trips.

Accordingly, travel companies could develop products around the major cities as well as culture-trip products inside the cities in response to the desire for short-haul trips exploring new attractions with a preference for culture visits. Companies have begun to act on these trends. For example, Dishui Lake, an hour’s drive from Shanghai witnessed double the number of tourists from 2019 to 2021. 6 “900,000 in 7 days!,” Shanghai Observer , January 28, 2022. In another example, several leading travel-product providers have increased the number of citywalk products for historical sites.

Consider channels: Generation Z and the Silver Generation are different, but not as different as expected

The survey shows that Generation Z and the Silver Generation share many similarities in terms of travel destinations, key travel considerations, how they book their trips, and where they get inspired for their next trip.

Both Generation Z and the Silver Generation have lower income than other groups, but both are important emerging segments for tourism. Generation Z is growing into the future traveler of the tourism market and the Silver Generation is gaining proportion given China’s aging society and this segment’s high travel frequency. The percentage of Chinese citizens above the age of 55 doubled between 1990 and 2020, growing from 12 to 24 percent. 7 United Nations World Population Prospects 2019.

The Silver Generation is now the most active travel segment. The majority of this generation (87 percent) travelled in the past 1-3 months, compared to 60 percent of Generation Z. The average across all age groups for travel in this period is 65 percent. At the time of the survey, a larger portion of Generation Z respondents had traveled in the past two weeks (94 percent). This is the highest for all age groups—with the Silver Generation at 87 percent and the average across age groups at 92 percent.

Digital media as source of travel inspiration is taking the lead, across both generations, but the nuances lie within the digital channels. Both Generation Z and the Silver Generation find inspiration in digital adverts and promotions and are open to digital channels including mobile adds and online travel forums.

The Silver Generation is more inspired by mobile adverts of local agency (11 percent higher than the group average) and less inspired by online videos (9 percent less than the group average). This generation is also inspired by local online travel forums such as Mafengwo, 16 percent higher than the group average.

By comparison, Generation Z is more influenced by online video adverts (13 percent higher than the group average). This generation is less influenced by mobile adverts of local agency (15 percent less than the group average). Across sources of inspiration from related articles and commentaries, Generation Z is more influenced by key opinion leaders or key opinion consumers (6 percent higher than the group average).

Both generations use similar booking channels, with official websites of local online travel companies as their top choice. For instance, 30 percent of Generation Z respondents prefer to book a trip via an official website of a local online travel company, followed by 28 percent via mobile applications of local online travel agencies, and 20 percent via official websites of hotel chains. For the Silver Generation, 40 percent prefer to book a trip via an official website of a local online travel company, followed by 23 percent using stores of traditional travel agencies, and 21 percent booking through customer hotlines of traditional travel agencies. The use of online travel agencies is relatively low (17 percent for official websites of hotel chains and 14 percent for hotlines of hotel chains).

Given that Generation Z and the Silver Generation are emerging as major market segments, with similar demand for product offerings, travel companies can respond to the nuances of how these groups seek inspiration and make bookings. For example, in terms of communication, the Silver Generation seeks inspiration from travel forums, while Generation Z is more likely to respond to short videos. Although the Silver Generation is open to digital channels, they still value human interaction when booking travel.

Cultivate loyalty, beyond loyalty programs

Travel companies may have an opportunity to cultivate loyalty. Brands and loyalty programs may no longer be a defining factor. Instead, satisfaction and uniqueness are becoming increasingly important in making travel choices.

The survey shows that non-branded hotels are generally more popular than branded hotels (56 percent non-branded; 44 percent branded hotels). While branded hotels are still attractive, 40 percent of respondents tend to choose hotels or brands that they have stayed in recently and where they have had a good experience. This highly loyal consumer behavior is more apparent in high-income, middle-aged and senior citizens, and people in tier-1 cities. In the past, loyalty programs have been effective in retaining high-income groups or the Silver Generation, but younger travelers tend to opt for experience rather than brands or loyalty points. Generation Z has higher appetite for local boutique hotels (5 percent more than the group average) but less preference to return to a hotel they have previously visited.

Additionally, there is increasing appetite for local boutique hotels as well as for products that leverage collaboration with other companies to better reach targeted customer groups or offer unique experiences. Among the 56 percent of travellers who prefer to stay in non-branded hotels, 22 percent of these tend to stay in boutique hotels characterized by local or unique features. Across non-branded hotels, the top choice from respondents across all age groups is for boutique hotels and beach resort villas that offer an experience of an exotic culture, or B&B’s and homestays that offer a local experience (Exhibit 6).

When comparing demand in terms of the percentage of respondents interested in branded hotels, there is a disproportional demand for premium hotels and budget hotels. Mid-tier hotels may find it more challenging to capture demand.

Loyalty is now formed around good experiences, unique offerings, or services that make the trip memorable or more convenient, instead of being driven purely by points or discounts. For instance, health and safety concerns such as sanitation and privacy have increased in importance, ranging from 36 percent to 48 percent. But price and promotions still play an important role, particularly with Silver Generation customers. Convenience is a factor: easy-to-go offerings have increased in importance from 25 percent to 39 percent, and door-to-door trip offerings have increased from 26 percent to 35 percent. The only factor that decreased in importance is comfort, from 47 percent to 36 percent.

Accordingly, travel companies can focus on uniqueness or experience to drive loyalty, in tandem with loyalty programs or discounts. They could also consider developing seasonal offerings to satisfy customers’ desire for new attractions and experiences. Branded hotel chains could also expand their offerings by including local experiences.

Actions travel companies can consider

Desire for travel is evident and pent-up demand for outbound travel is accumulating. At the same time, interest in domestic travel is recovering, even though it is temporarily dampened by sporadic COVID-19 outbreaks. In this landscape, travel companies can prepare for surges in demand while taking into account emerging travel preferences. Travel companies may want to tailor their tactics to better serve travelers. In particular, travel companies can be more flexible around customers changing their plans, given rapid changes in policy. They can also focus on local populations within driving distance, differentiate offerings to match shifts in demand, and cultivate loyalty through extra attention to satisfaction and uniqueness. Travel companies can also make use of digital channels to reach customers, and tailor content and format per market segment.

Trends indicate that opportunities are emerging in the domestic market. On the other hand, there are still uncertainties in 2022. Travel companies have the chance to enter the new year with eyes wide open to the changes and manage them closely, while diversifying travel offerings and marketing models to cater to the domestic market—and potentially forging the new domestic operating model into long-term sustainable and inclusive growth.

Jackey Yu and Guang Chen are partners in McKinsey’s Hong Kong Office; Steve Saxon is a partner in McKinsey’s Shenzhen office; and Cherie Zhang is a knowledge expert in the Shanghai office.

The authors wish to thank Glenn Leibowitz, Tairan Xu, Carrie Ma, Zi Chen, and Alex Yang for their contributions to this article.

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China’s Tourism Sector Prospects in 2023-24

Amid the post-pandemic recovery, China’s tourism sector is rebounding with vigor in 2023. We discuss the resurgence of outbound and domestic travel, evolving traveler behavior, and tech-enabled trends in this article. From cultural exploration to wellness escapes and digital integration, the stage is set for foreign businesses and investors to seize opportunities in this transformed landscape.

After enduring the significant impacts of the COVID-19 pandemic, China’s tourism sector is gearing up for a strong resurgence in 2023. Projections indicate that the total revenue from domestic tourism is expected to exceed RMB 4 trillion (approximately US$580.96 billion), marking an impressive 96 percent growth. Several driving forces contribute to this revival in China’s tourism landscape, including:

• Easing of travel restrictions;
• Increase in disposable income among Chinese consumers; and
• Growing popularity of domestic tourism.

In particular, the government’s support in revitalizing the tourism sector is evident through subsidies and tax exemptions provided to tourism enterprises. The robust resurgence of China’s tourism industry also serves as a positive indicator for the nation’s economy, with tourism being a significant driver of economic growth and expected to contribute notably to the country’s GDP. Overall, 2023 has seen a continuous stream of new policies, products, technologies, concepts, trends, and opportunities impacting the tourism industry.

China’s evolving tourism landscape

Insights from outbound tourism in h1 of 2023.

Both outbound and inbound tourism markets in the first half of 2023 have shown impressive vitality, surpassing the levels observed in the same period of 2019. Average expenditures for outbound travelers have exhibited a notable increase, with Hong Kong and Macao leading the resurgence of outbound tourism. The total number of inbound and outbound individuals has surged by approximately 170 percent.

Data from the World Tourism Alliance’s reports, reveal that the outbound tourism sentiment index reached 28 percent in the first half of 2023, marking a 21-point increase from the same period in 2019. The outbound tourism market has displayed a gradual “U-shaped” recovery, emphasizing a steady resurgence rather than an abrupt rebound.

According to recent data from Alipay’s Overseas Spending Platform, the average expenditure per user for outbound travel in the first half of 2023 grew by 24 percent compared to 2019. Among popular destinations, the top 10 outbound travel destinations in terms of transaction volume for the first half of 2023 were:

• South Korea;
• United Kingdom; and

This data is supported by several favorable policies. Since the beginning of the year, the National Immigration Administration has continuously optimized and adjusted inbound and outbound management policies.

Starting from February 20, 2023, mainland cities within the Greater Bay Area initiated a pilot implementation of visa endorsements for cross-border talent to and from Hong Kong and Macao. On May 15, 2023, policies such as the nationwide implementation of group travel endorsements for mainland residents traveling to Hong Kong and Macao were fully restored.

The streamlined and optimized policies for travel to Hong Kong and Macao prompted provinces across the mainland to organize multiple tour groups, leading to a consistent rise in mainland visitors to these regions. According to data released by the Hong Kong Tourism Board, nearly 13 million visitors arrived in Hong Kong in the first half of 2023, of which approximately 10 million were mainland visitors, accounting for around 77 percent of the total.

Furthermore, based on recent data released by the National Immigration Administration, the first half of 2023 witnessed a total of 168 million inbound and outbound individuals passing through China’s immigration, marking a year-on-year increase of 169.6 percent.

At the same time, approximately 42.798 million entry and exit permits for travel to and from Hong Kong, Macao, and Taiwan were issued, indicating a significant 1509 percent increase compared to the same period in 2022.

These figures further underline China’s promising revival in outbound tourism. Indeed, Chinese tourists have once again become a significant force driving global tourism and offline consumption.

In terms of outbound travel numbers, the top 10 departure cities were: Shenzhen, Shanghai, Guangzhou, Beijing, Hangzhou, Foshan, Dongguan, Zhuhai, Chengdu, and Wuhan. This highlights that outbound travel is mainly concentrated in first-tier and new first-tier cities, with the “Guangzhou-Shenzhen-Foshan-Dongguan-Zhuhai” Greater Bay Area cities also playing a pivotal role in outbound tourism.

The primary reason driving Chinese tourists to travel abroad is leisure, with business and visiting friends and relatives (VFR) as the subsequent motivations. The rapid expansion of outbound tourism from China can be attributed to the rising incomes of the middle class , the growing desire among Chinese travelers to explore diverse countries and cultures, and the ease of obtaining visas and fulfilling entry criteria for various destinations.

Moreover, the retail sector captures the largest portion of Chinese tourists’ spending when traveling abroad and is anticipated to retain its dominant position in terms of outbound tourism expenditure over the projected timeframe.

The steady recovery of outbound tourism

Initial expectations for a robust rebound in outbound tourism this year have encountered a more precarious reality. Notable evidence of this transformation is seen in the changing preferences of Chinese leisure travelers. As reported by CNBC, the desire to travel abroad has surged from 28 percent to 52 percent among Chinese leisure travelers since last year, nearly doubling.

Business travel intentions have tripled, and interest in education, family visits, and medical tourism abroad is also on the rise. Other findings align, revealing that 50 percent of Chinese travelers plan to journey internationally within the next year.

A significant shift has also occurred in travel fears, particularly concerning Covid contraction. While it topped travelers’ concerns in 2022, it has diminished to the least worrisome aspect this year, as per Morning Consult’s survey. This shift reflects growing traveler confidence. Factors influencing this gradual recovery go beyond preferences. A recent report from the Mastercard Economics Institute reveals a shift in Chinese residents’ spending patterns.

Known for their shopping inclination, there’s a rising trend toward investing in experiences over possessions, particularly in a zero-Covid environment. Despite global economic uncertainties, Asia-Pacific’s, including China’s, travel recovery remains steady. As travel capacity grows, costs are anticipated to decrease, fueling a more dynamic travel landscape.

Contrary to an instant “boom,” China’s international travel revival is unfolding steadily. Though not as swift as initially projected, the evolving interests, changing attitudes, and gradual shift toward experiential spending all point to a growing and adaptive outbound tourism sector, offering a promising glimpse into the future.

The Chinese government’s recent efforts to revive outbound group travel

China’s Ministry of Culture and Tourism recently expanded outbound group tour destinations, including popular places like Japan and the US. A recent analysis provided by the EIU indicates that this move will aid global tourism recovery, benefiting countries with simplified visa procedures.

While the relaxed restrictions will moderately boost outbound tourism, obstacles and cautious spending persist. Nonetheless, domestic travel agencies are expected to see increased revenue, leading to employment and income growth in the sector.

However, challenges such as limited flights and labor shortages could hinder outbound tourism’s full recovery. A complete relaxation of restrictions is predicted in late 2023, but pre-pandemic outbound levels might not return until 2025.

Domestic tourism is thriving

In the first half of 2023, domestic tourism revenue (total tourist spending) reached RMB 2.3 trillion (approx. US$318 billion), marking a substantial increase of RMB 1.12 trillion (approx. US$155 billion) compared to the previous year. Notably, urban residents’ expenditures on travel accounted for a year-on-year surge of 108.9 percent, while rural residents’ travel spending grew by 41.5 percent.

The remarkable rebound of China’s domestic tourism sector can be attributed to a set of factors that differentiate it from the relatively slower recovery of outbound tourism. For one, the domestic tourism industry appears to be less affected by uncertainties surrounding employment and income growth compared to other service and retail sectors.

This is primarily due to the strong yearning of Chinese consumers to explore after years of mobility limitations imposed by the pandemic.

On the other hand, the prolonged revival of outbound flights has further bolstered the domestic tourism scene. Many individuals redirected their travel plans within China as international travel remained limited.

Notably, the return of international air traffic to approximately 80 percent of pre-pandemic levels is not expected until the fourth quarter of 2023, which creates a favorable environment for the vigorous resurgence of domestic tourism in the meantime.

Changing Chinese travelers’ preferences in 2023

In the wake of the COVID-19 pandemic and the subsequent travel restrictions, Chinese travelers underwent a transformation in their preferences and behaviors. Over the past three years, while international travel remained limited, domestic exploration thrived.

Around 8.7 billion domestic trips were taken, indicating an annual rate of around 50 percent of pre-pandemic levels. This period allowed the domestic market to mature, and travelers became more sophisticated in their pursuits, engaging in various new leisure experiences such as beach resorts, skiing trips, and city “staycations.”

As a result, the post-COVID-19 Chinese traveler exhibits distinct traits: heightened digital savvy, elevated expectations, and an appetite for novel experiences. These characteristics paint the profile of a typical Chinese traveler in 2023:

• Experiences matter: Survey data reveals that the rejuvenated Chinese tourist is driven by experiential travel. While outdoor and scenic trips remain popular, the preferences have evolved. Sightseeing and culinary experiences, highly valued in the initial survey series, are now joined by a growing interest in culture and history, beaches, and resorts, as well as health and wellness. This shift solidifies the trend towards experience-driven travel. Additionally, activities like skiing and snowboarding have gained popularity, possibly influenced by the 2022 Beijing Olympic Winter Games .
• Digital expert: Chinese travelers are among the world’s most digitally adept consumers, easily integrating mobile technologies and social media into their daily lives. The pandemic further propelled their online engagement. Short-form videos and livestreaming have emerged as dominant online entertainment options.
• Curious: The desire to explore novel experiences in unfamiliar destinations remains strong among Chinese travelers. Despite travel radius limitations imposed by policies, survey respondents express eagerness to visit new attractions. Instead of revisiting familiar places, 45 percent of participants prioritize short trips to new sites, while long trips to new destinations are the second most favored option.

Emerging trends and destinations

Cultural and heritage tourism.

A significant shift in China’s tourism landscape is the increasing emphasis on cultural tourism, where traditional heritage seamlessly intertwines with contemporary travel. As the nation preserves and celebrates its abundant historical and cultural treasures, a surge in cultural tourism activities like immersive experiences and interactive exchanges has taken center stage.

This trend is particularly pronounced in the realm of domestic tourism, where travelers are flocking to heritage sites and cultural landmarks to gain a deeper understanding of China’s rich heritage.

Moreover, the development of cultural and tourism industries constitutes a crucial component of China’s cultural confidence-building efforts. This sector has received significant attention from the government, evidenced by policies like the “14th Five-Year Plan for Cultural Development” and the “14th Five-Year Plan for Tourism Industry Development.” Such policies drive the integration of culture and tourism, increase the supply of cultural tourism products, and enhance the quality of such offerings.

Wellness tourism

In 2023, a remarkable shift in travel preferences among Chinese tourists has propelled wellness and health tourism to the forefront. As observed by Rung Kanjanaviroj, Director of the Tourism Authority of Thailand’s Chengdu office, Chinese travelers are displaying a distinct preference for destinations that offer a blend of sunny beaches and holistic well-being experiences.

This evolving trend has prompted destinations like Thailand to proactively adapt by refining their offerings. Through the enhancement of health tourism services and a focus on engaging student and youth travelers, Thailand has positioned itself as a prime destination for those seeking rejuvenation and self-care during their journeys.

The rise in wellness and health tourism reflects a broader shift in Chinese travelers’ priorities, as they seek destinations that not only provide scenic beauty but also nurture their physical and mental well-being.

Tech-enabled tourism in China’s innovative travel landscape

China’s tourism industry has evolved dramatically through the fusion of technology and changing consumer demands. In 2023, the landscape is marked by a growing emphasis on tech-enhanced experiences that cater to modern travelers’ evolving preferences that foreign businesses and investors in the sector can learn from.

• Smart appliances and IoT integration: China’s tech-driven tourism trend showcases the integration of smart appliances and the Internet of Things (IoT) into the travel journey. Travelers now wield the power to personalize their environment and encounters via smartphone apps. Innovations range from smart hotel rooms adjusting lighting, temperature, and ambiance to IoT-enabled transportation providing real-time updates, enhancing comfort and efficiency.
• Virtual and augmented reality immersion: Tech-savvy Chinese travelers are increasingly seeking immersive encounters. Virtual and augmented reality (VR/AR) have taken center stage, enabling tourists to explore historical sites, cultural landmarks, and natural marvels through virtual tours that breathe life into destinations. This not only enhances engagement but also serves as a potent tool for destination marketing.
• Seamless contactless services and digital payments : Contactless services and digital payments have become integral to China’s tech-enhanced tourism scene. Travelers can navigate touchpoints like check-in, security, dining, and shopping with minimal physical interaction. QR codes have revolutionized payment methods, enabling transactions through smartphones, and eliminating the need for physical currency or cards, in alignment with the country’s cashless society drive.

The city of Hangzhou offers a glimpse into the future of tech-enabled tourism. Hangzhou’s West Lake, a UNESCO World Heritage site, now features interactive kiosks that provide historical context, virtual guides, and navigation assistance to visitors. These digital enhancements blend seamlessly with the serene natural landscape, enriching the cultural experience.

Similarly, the China National Tourist Office uses VR to transport potential travelers to iconic destinations. Through immersive VR experiences, individuals can virtually explore the Great Wall, the Terracotta Army, and other renowned sites, sparking wanderlust and encouraging travel planning.

Preparing for the return of Chinese tourists to the international scene

The gradual easing of travel restrictions in China still presents a promising avenue for the recovery of the international travel and tourism sector. Amid this positive outlook, attracting Chinese tourists is becoming a priority for global businesses.

Chinese travelers, known for their enthusiasm to explore beyond their borders, are now seeking immersive experiences, quality accommodation, and exceptional service. Here are some strategies that foreign businesses can employ to entice and captivate the adventurous Chinese traveler.

Crafting authentic and familiar experiences

After a three-year hiatus from overseas travel, Chinese tourists are now yearning for high-quality experiences in familiar destinations.

They are looking beyond traditional shopping and sightseeing, expressing a keen interest in entertainment and experiential offerings. Theme parks, cultural activities, water sports, snow sports, and shows are among the sought-after activities.

The key is to offer authentic experiences that resonate with Chinese travelers’ desires for immersion, while still maintaining a touch of familiarity.

Businesses should leverage deep customer insights to design offerings that strike a balance between accessibility and authenticity, ensuring a comfortable yet exciting experience.

Harnessing the power of social media

Social media, particularly short videos, has emerged as a pivotal source of travel inspiration for all age groups. Tourist destinations have capitalized on this trend by launching engaging short video campaigns, maximizing exposure and engagement.

The burgeoning trend of city-walking , for example, where urban exploration is undertaken solely on foot, has not only captured the attention of locals but has also made significant waves across various social media platforms. Chinese netizens are embracing this form of experiential travel, and businesses can leverage social media to align with their preferences.

Platforms like Douyin, China’s counterpart to TikTok, have witnessed the rise of “city-walk content”. A recent video showcasing city-walk routes in Guangzhou amassed over 171,000 likes and found its way into the favorites of 72,000 viewers.

Furthermore, Xiaohongshu, a prominent lifestyle-sharing platform in China, reported a remarkable 30-fold increase in searches related to city walk during the first half of 2023 compared to the previous year.

Businesses can leverage social media platforms to connect with potential Chinese tourists, employing captivating content and innovative campaigns to pique their interest. Creating a strong presence on platforms like TikTok and engaging with influential figures can significantly boost visibility.

Collaboration with Internet giants

China’s tech-savvy travelers are deeply intertwined with the digital world, and internet giants like WeChat and Alipay play a pivotal role in their daily lives. Foreign businesses can tap into these existing digital ecosystems rather than starting from scratch.

For instance, Amsterdam’s Schiphol Airport offers a WeChat Mini Program providing information about the airport, including duty-free shopping and travel planning. Alibaba’s Alipay, renowned for its mobile payment capabilities, has partnered with tax refund agencies to streamline the tax refund process for Chinese travelers.

Such digital innovations enhance convenience and are fast becoming an expected norm.

Prioritize direct-to-consumer (D2C) channels

Navigating China’s intricate travel distribution landscape can be complex, as it encompasses diverse channels, such as online travel agencies (OTAs), online travel portals (OTPs), and traditional travel agencies. To make the most of this landscape, businesses can consider embracing D2C channels.

By leveraging social media platforms and official brand platforms, businesses can create a compelling value proposition that resonates with Chinese travelers. Investing in D2C channels not only enhances branding but also facilitates direct engagement with potential tourists, allowing for a personalized and enticing approach.

Key takeaways: Navigating China’s tourism resurgence

All in all, in 2023, China’s tourism is making a strong comeback, driven by key trends that reveal changing traveler preferences.

Domestically, easier travel rules and higher incomes are fueling local exploration. Internationally, outbound tourism is gradually recovering with a focus on immersive experiences, wellness, and cultural discovery.

Chinese travelers are becoming more tech-savvy, seeking out tech-enhanced experiences like virtual reality tours. This shift is boosting cultural, heritage, and wellness tourism.

Social media, especially platforms like TikTok and WeChat, are vital for engaging with Chinese travelers effectively.

In essence, China’s tourism resurgence is multifaceted, with travelers seeking enriched experiences, digital engagement, and authenticity.

Businesses that align with these preferences and capitalize on domestic and international opportunities are likely to thrive in the evolving travel landscape.

China Briefing is written and produced by Dezan Shira & Associates . The practice assists foreign investors into China and has done so since 1992 through offices in Beijing, Tianjin, Dalian, Qingdao, Shanghai, Hangzhou, Ningbo, Suzhou, Guangzhou, Dongguan, Zhongshan, Shenzhen, and Hong Kong. Please contact the firm for assistance in China at [email protected] .

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A new wave of travellers from China has started which will soon bring China back to the top position as the biggest international tourism source market. The bottlenecks in China and in the host destinations have mostly disappeared, allowing the pent-up demand for business trips, honeymoons, family visits and leisure and special interest trips to be started. 

For almost 20 years COTRI has supported international service providers and destinations to cater successfully and sustainably for Chinese visitors, from the years dominated by package tours and shopping at “must-see” destinations to the new wave of visits to newly discovered destinations for new experiences and activities in smaller customised groups or as FITs.

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CHINA OUTBOUND TOURISM RESEARCH INSTITUTE

Timeline: Development of COTRI and China outbound tourism 1978 First visit of Prof. Dr. Wolfgang Georg Arlt to People’s Republic of China 2004 Start of COTRI with offices in Stralsund and Beijing, first CTW Award with ceremony at ITB Berlin 2004 China outbound start of strong growth after ADS sytem allows tourism visa for many countries 2006 First Chinese-language website for provincial DMO in Germany produced by COTRI 2007 Start of Chinese outbound tourism trainings by COTRI in different countries 2008 COTRI moves to Heide/Holstein 2012 China achieves status as biggest international tourism source market 2015 COTRI starts data supply to Bloomberg 2016 COTRI moves to Hamburg 2018 CTW China Tourist Welcome Award co-organised with trip.com 2020 China closes borders due to pandemic, COTRI closes Beijing office 2023 Restart China outbound tourism 2023 COTRI signs cooperation agreement with ETC European Tourism Commission 2023 Restart CTW Award in Guangzhou during GITF Conference 2023 Start COTMI weekly publication

PROF. DR. WOLFGANG GEORG ARLT FRGS FRAS

Born 1957 in West-Berlin, M.A. Sinology FU Berlin, Mandarin courses Fu-Jen University Hsinchu/Taiwan, Cantonese courses CU Hong Kong First visit to People’s Republic of China 1978 1986-1999 Tour operator for trips to China (1986-89) and from China (1991-1999) 2002 PhD (Dr. rer.pol.) FU Berlin 2002-2020 Professor for International Tourism Management FH Stralsund / FH Westkueste, Guest professor in China, United Kingdom, Australia, New Zealand Since 2004 Founder and CEO COTRI China Outbound Tourism Research Institute Since 2021 Founder and CEO MTC Meaningful Tourism Center Fellow Royal Geographical Society (London) Fellow Royal Asiatic Society (London) Research Fellow Japanese Society for the Promotion of Science (Tokyo) Fellow International Association of China Tourism Studies (Guangzhou) Member Expert Committee WTCF World Tourism Cities Federation (Beijing) Secretary General for Cultural and Tourism Industry EUCNC EU-China Commission (Brussels/Beijing)

Publications include:

Arlt: China’s Outbound Tourism (2006/2011), (Routledge) Arlt: Chinese outbound tourism in the post-SARS-CoV-2 era, in: Wen, J., Kozak, M. (eds.): Chinese Outbound Tourist Behaviour (2022), (Routledge) Arlt: Meaningful Tourism. Best Practice Examples for a Sustainable Future (2022), (COTRI) Arlt/Bowerman: 88 Practical Ways to Prepare for the next Wave of Chinese visitors (2023), (COTRI) Arlt/Bowerman: The Return of Chinese Outbound Tourism (2023), (Routledge) Editor: COTRI Intelligence (weekly publication) (COTRI)

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China outbound visits rise twofold and exceed 87 million in 2023

The number is projected to jump to 130 million by the end of 2024.

Experts and industry insiders are confident of the steady development of the Chinese mainland's outbound and inbound tourism, and are calling for more measures to improve international travelers' experiences to revitalize the stillweak inbound tourism market.

The China Tourism Academy estimates that the number of outbound visits exceeded 87 million in 2023, a twofold increase compared with the previous year. The figure is more than half of that in 2019, before the COVID-19 pandemic hit the world.

The number of outbound visits is projected to jump to 130 million by the end of this year, allowing the Chinese economy to recover further and paving the way for more international flights and continuous optimization of visa policies, according to the academy.

The Hong Kong and Macao special administrative regions remained the top choices for outbound tourists in the first half of 2023, while the traditionally popular overseas destinations among Chinese travelers, such as Japan and South Korea, saw some European and African rivals, including France, Italy and Egypt, according to the academy.

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Reopening China: data indicates outbound travel rebound

Now that China has started to finally ease travel restrictions, Sabre has sifted through its extensive shopping and booking data to examine the impact of the reopening through February 9, 2023 on tourism in China, and globally. Key findings, following re-opening announcements on December 26, January 8, and January 20, include:

• A significant spike in shopping queries and requests, particularly for the outbound tourism industry;
• Strong demand among Chinese travelers for trips despite high air fares, with fares peaking at more than 2x in January, and 1.5x in February when compared to pre-pandemic prices;
• Demand is outstripping supply with Chinese airlines leading capacity growth;
• New booking habits suggest long-term travel confidence.

A surge in search and booking requests

Sabre’s shopping insights revealed that interest in inbound and outbound China routes surged in the week of 26 December, when China first announced plans to drop quarantine for overseas visitors, and again when mainland China reopened sea and land crossings with Hong Kong on 8 January.

Weekly searches for China-related routes (including the Special Administrative Regions of Hong Kong and Macau) have been increasing steadily after the announcements, and average weekly searches in the first 5 weeks of 2023 through to February 5, 2023 have been 78% higher compared to average weekly searches in Q4 2022.

Interest rose immediately after the announcement at the end of last year that China would re-open its borders. On January 8, China then opened sea and land crossings with Hong Kong, and ended a requirement for incoming travelers to quarantine, leading to another immediate increase in search and shopping requests, as travellers in China, many of whom hadn’t been able to visit family for years as a result of China’s previous zero-Covid policy, rushed to make bookings.

Another key factor, which has accelerated travel interest in the region, was the celebration of the first Chinese New Year without travel restrictions, with high levels of outbound, inbound, and domestic travel indicating strong travel demand and confidence in China.

On January 20, it was announced that the ban imposed on group travel would end on February 6. Bookings began to rise significantly, especially between January 30 – February 5, with bookings increasing 60% from average bookings in the previous 2 weeks.

Strong outbound bookings but inbound tourism remains stymied

The re-opening of China is already proving to be a key win for tourism recovery, and potentially providing economic growth, within the Asia Pacific region. In general, outbound travel has rebounded faster than inbound travel to the region, with Sabre data showing outbound bookings making up 43.5% of 2023 overall travel through February 9, compared to 37% for the same period in 2019.

As of February 9, Japan, Thailand and Korea are the top three destinations for Chinese outbound travel in 2023, with Korea rising to the 3 rd spot from 5 th in the same time in 2019. Bookings for the United Kingdom, Thailand and Philippines have bounced back the fastest versus bookings made in the same period in 2019. Indonesia, a top outbound destination in 2019, lost its spot in the top 10 to the Philippines.

It was reported that Indonesia slowed down on promoting their destination to China travelers during the pandemic, possibly impacting Indonesia’s position in the list.  Australia’s fall to 9 th place may have been impacted by measures implemented on travel inbound from China.

However, while outbound travel is enjoying a strong rebound, restrictions in place for inbound travel appear to be limiting inbound travel recovery.

Long-awaited reunions fueling inbound bookings

Sabre’s booking data shows that the largest sources of inbound travel for China so far in 2023 are Taiwan, the United States, Thailand, Korea, the United Kingdom and Canada, with Thailand, the United Kingdom, and Canada bouncing back fastest in terms of recovery, as of February 9.

Given that inbound travelers must be holding a valid permit for work, study or reunion, a diplomatic visa or valid business cards, it is possible that one of the main motivations for inbound travel is for long-awaited family reunions, following the lengthy lockdown period. This generally aligns with population figures released in 2021, which showed countries with the largest number of overseas nationals were based in Thailand, Canada, and the United Kingdom.

Outbound travelers are also opting for longer stays, with the share of trips longer than two weeks increasing from 14% to 21%, when comparing 2019 to 2023 (through February 9). This could be due to travelers visiting family opting to make the most out of their trip after lengthy periods apart.

Long-term travel confidence and new booking habits

Although there is still some way to go before all travel restrictions are lifted for travel to and from China, Sabre data indicates the potential for long-term travel confidence. Booking windows can be a key confidence metric, as travelers are often happier to book further out if they feel confident about their plans.

As of February 5, 33% of all inbound bookings and 43% of all outbound bookings were made more than two months in advance, showing that there was a likely expectation that travel restrictions may ease further in the next two months and beyond. There were only 21% of outbound and 14% of inbound bookings made for travel within 2 weeks, versus 37% and 30% in the same period in 2019.

Travelers appear to be planning further ahead now, when compared to 2019 where there were more last-minute bookings. This may be due to new booking habits learned from the Covid-19 pandemic, where travelers have gotten used to pre-planning instead of impromptu trips, or the fact that capacity for China routes have yet to recover to pre-pandemic levels and there are fewer available for last-minute bookings.

Bookings are also slowly recovering to what we saw pre-pandemic, with outbound travel bookings made by February 9 for travel in first week of April reaching 70% of passenger bookings made by February 9 in 2019.

Demand outstrips supply and fare prices remain high

As of February 6, airline capacity for international routes to and from China (including Hong Kong and Macau) has recovered to only around 27%, compared to Q1 2019, with capacities expected to increase from April onwards.

Currently, most of the scheduled capacity is coming from Greater China airlines, along with carriers in Japan, Korea and Taiwan. Chinese airlines hold more than two thirds (65%) of total international route capacity, versus 60% in 2019. Global (non-Chinese) airlines have yet to add significant capacity for China, and SEA airlines also hold only 12% of international capacity for China, compared to 16% in 2019.

With what appears to be a slow recovery for capacity, Sabre ticketing data indicates that ticket prices for top Greater China inbound and outbound routes are reported to be higher compared to prices in 2019, with ticket sales increasing since September 2022. As airlines have begun to add in capacity, prices have lowered slightly to around 1.5 times pre-pandemic prices in February versus 2 times in January. Prices are however expected to remain higher until supply has been fully restored on the capacity front.

As demand has outweighed supply, resulting in higher prices, passengers appear to remain keen to fly, and are proving to be less price sensitive, possibly due to the “revenge travel” phenomenon resulting from the long lockdown period.

“The speed with which Chinese tourism started to rebound as soon as the announcements were made that restrictions were to be lifted demonstrates how high travel demand is for both inbound and outbound trips,” said Darren Rickey, Senior Vice President, Airline Global Sales, Sabre. “We know that airlines in China have been preparing for re-opening by ensuring they have the support of Sabre’s advanced technology to quickly respond to evolving industry conditions, to capitalize on recovery trends, and create their own growth momentum. We’re now excited to see what the rest of the year holds for Chinese travel.”

Sabre Corporation is a leading software and technology company that powers the global travel industry.

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UN Tourism | Bringing the world closer

Tourism statistics database.

• 145 Key Tourism Statistics
• Economic Contribution and the SDGs

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145 key tourism statistics

Data are collected from countries by UN Tourism through a series of yearly questionnaires that are in line with the International Recommendations for Tourism Statistics (IRTS 2008 )  standard led by UN Tourism and approved by the United Nations.

The latest update took place in 24 November 2023.

Access the data by clicking on the sections below:

Inbound Tourism

Arrivals (in thousands) 2022 or latest available year

Total Arrivals in country over time Please select a country on the map above to display data below

Arrivals in country by region of origin *

Arrivals in country by Transportation Mode

Arrivals in country by Main Purpose of trip

Accommodation

Accommodation: Guests and Overnights Please select series on top 2022 or latest available year

Total Guests in country

Total Overnight stays in country

Inbound Expenditure

Inbound Expenditure (in million USD) 2022 or latest available year

Total Inbound Expenditure in country

Inbound Expenditure in country by type of expenditure

Total arrivals

Total international arrivals. Data disaggregated by: Overnight, Same-day (of which, cruise passengers)

Expenditure

Total inbound tourism expenditure, disaggregated by: Travel, Passenger Transport

Total arrivals by region

Total international arrivals, disaggregated by region of origin. Regions include: Africa, Americas, East Asia and the Pacific, Europe, Middle East, South Asia

Total arrivals by Main Purpose

Total international arrivals, disaggregated by Main Purpose of the trip. Main Purpose categories include: Personal (holiday and vacation, other personal), Business and professional

Total arrivals by Mode of Transport

Total international arrivals, disaggregated by Mode of Transport of the trip. Modes of Transport include: Air, Water, Land (railway, road, other)

Total arrivals by form of organization

Total international arrivals, disaggregated by form of organization. Forms of organization include: Package tour, Other

Accommodation: Guests and Overnights

Total number of Guests and Nights spent in accommodation establishments. Data disaggregated by: All establishments, Hotels and similar establishments.

Expenditure by Main Purpose

Total inbound travel expenditure, disaggregated by Main Purpose of the trip. Main Purpose categories include: Personal, Business and professional

Other indicators

Other relevant indicators related to inbound tourism. These include: Average size of party, Average length of stay, Average expenditure per day

Domestic Tourism

Domestic Trips (in thousands) 2022 or latest available year

Domestic Trips over time: Select Country on top

Domestic Trips vs International Arrivals: Select Type of Trip / Arrival on top

Domestic Tourism in Accommodation 2022 or latest available year

Domestic Tourism in Accommodation over time:

Variable displayed: Overnights Select Country on top

Variable displayed: Guests Select Country on top

Domestic vs Inbound Tourism in Accommodation

Overnights in Hotels and similar Select Country on top

Overnights in All Establishments Select Country on top

Guests in Hotels and similar Select Country on top

Guests in All establishments Select Country on top

Total trips

Total domestic tourism trips, disaggregated by: Overnight, Same-day

Total trips by Main Purpose

Total domestic tourism trips, disaggregated by Main Purpose of trip. Main Purpose categories include: Personal (holiday and vacation, other personal), Business and professional

Total trips by Mode of Transport

Total domestic tourism trips, disaggregated by Main Mode of Transport. Modes of Transport include: Air, Water, Land (railway, road, other).

Total trips by form of organization

Total domestic tourism trips, disaggregated by form of organization of the trip. Forms of organization include: Package tour, Other

Total number of Guests and Nights spent in accommodation establishments by domestic tourists. Data disaggregated by: All establishments, Hotels and similar establishments

Other relevant indicators related to domestic tourism. These include: Average size of party, Average length of stay, Average expenditure per day

Outbound Tourism

Departures (in thousands) 2022 or latest available year

Departures over time

• Overnights Visitors (tourists)
• Same-Day Visitors (excursionists)
• Total (Tourists + Excursionists)

Outbound Expenditure

Tourism outbound expenditure (in million USD) 2022 or latest available year

Oubound expenditure over time Select a Country on top

Outbound expenditure by type of expenditure Select Country on top

Total Inbound vs Outbound Tourism Expenditure Select Country on top

Total departures

Total international departures. Data disaggregated by: Overnight, Same-day

Total outbound tourism expenditure, disaggregated by: Travel, Passenger Transport

Total outbound travel expenditure, disaggregated by Main Purpose of the trip. Main Purpose categories include: Personal, Business and professional

Other relevant indicators related to outbound tourism. These include: Average length of stay, Average expenditure per day

Tourism Industries

2022 or latest available year

Total number of Bed-places Select Country on top

Total number of Hotels and similar establishments Select Country on top

Total number of Rooms in Hotels and similar Select Country on top

Occupation rate by bed-places and rooms Select Country on top

Average length of stay in hotels and similar Select Country on the top

Accommodation in hotels and similar establihsments

Monetary data related to accommodation activities. Indicators include: output, intermediate consumption, Gross Value Added, compensation of employees, Gross Fixed Capital Formation.

Non-monetary data related to accommodation activities. Indicators include: total number of establishments, total number of rooms, total number of bed-places.

Travel Agencies and other reservation services

Monetary data related to travel agencies and other reservation services activity. Indicators include: output, intermediate consumption, Gross Value Added, compensation of employees, Gross Fixed Capital Formation.

Non-monetary data related to travel agencies and other reservation services activity. Indicators include: total domestic trips , total inbound trips and total outbound trips.

Number of establishments by type

Total number of tourism establishments in the country, by type. Types of establishment include: Accommodation, Food and Beverage, Passenger transportation, Travel Agencies and reservation services, Other

Other relevant indicators related to performance of tourism industries. Indicators include: Occupancy rate (rooms, bed-places), Average length of stay, Available capacity

Total employees in tourism industries 2022 or latest available year Totals may include different industries depending on the reporting country

Total employees by tourism industries Dark red line indicates reported total Select Country on the top to display data

Number employees by tourism industry

Total number of employees, disaggregated by tourism industry. Tourism industries include: Accommodation, Food and Beverage, Passenger transportation, Travel Agencies and reservation services, Other

Number of jobs by status

Total number of jobs, disaggregated by: Employees, Self-employed

Number of full-time equivalent jobs

Total full-time equivalent jobs, as defined by the TSA:RMF 2008. Data disaggregated by status (employees, self-employed) and gender.

Macroeconomic Indicators

Based on additional data collected from several international sources, a number of macroeconomic indicators are compiled:

International Tourism Flows

Estimated international arrivals flows for 2018.

These regional and sub-regional flows visualizations are based on the following data reported by countries:

Arrivals: Border Statistics

Total arrivals of non-resident tourists and visitors at national borders, disaggregated by country of residence and citizenship

Arrivals: Statistics on accommodation establishments

Total arrivals of non-resident tourists in hotels and similar establishments and all types of accommodation, disaggregated by country of residence and citizenship

Overnight stays

Total overnight stays (total nights) of non-resident tourists in hotels and similar establishments and all types of accommodation, by country of origin

Detailed information on the metadata, country notes and methodologies used in the compilation of these data can be found in the Methodological Notes .

Publications on tourism statistics

UN Tourism´s flagship annual publications in the field of tourism statistics are the Compendium of Tourism Statistics and the Yearbook of Tourism Statistics . They contain the main data and indicators compiled by UN Tourism in e-book format (PDF).

Compendium of Tourism Statistics

The Compendium provides statistical data and indicators on inbound, outbound and domestic tourism, as well as on the number and types of tourism industries, the number of employees by tourism industries, and macroeconomic indicators related to international tourism.

Please click here to see the Index of indicators and basic data that form the Compendium. 

The 2023 edition presents data for 194 countries from 2017 to 2021, with methodological notes in English, French and Spanish.

Yearbook of Tourism Statistics

Understanding, for each country, where its inbound tourism is generated is essential for analyzing international tourism flows and devising marketing strategies, such as those related to the positioning of national markets abroad. The Yearbook focuses on data related to inbound tourism (total arrivals and overnight stays), broken down by country of origin.

The 2023 edition presents data for 187 countries from 2017 to 2021, with methodological notes in English, French and Spanish.

Country Fact Sheets

Country Factsheets include graphics on inbound tourism, domestic tourism, outbound tourism, tourism expenditure, tourism industries, tourism employment, Tourism Direct GDP and other macroeconomic indicators.

To download the latest Country Fact Sheet, please click on the country on the map below.

Photo: Chen Xia/GT

China is set to witness explosive growth in outbound tourism during the May Day holidays from May 1 to May 5 as data from major online travel agencies showed a strong surge in overseas tour bookings by Chinese travelers. International flight bookings for the first day of the May Day holidays reached a record high, increasing by 20 percent compared with 2019 levels. Nearly 100 outbound destinations saw a rise in flight ticket bookings, according to data Chinese travel platform Qunar shared with the Global Times on Wednesday. Hotel booking numbers showed that Chinese tourists are expected to visit 1,035 cities worldwide during the May Day holidays. The number of air ticket bookings for several visa-free destinations during the May Day holidays surpassed the figures recorded during the same period in 2019. Specifically, flight bookings for Thailand and Malaysia saw an increase of more than 30 percent, while bookings for Singapore and Georgia more than doubled. Chinese tourists also appear more willing to opt for longer-distance travel during the five-day holiday period. The Middle East and Europe emerged as popular choices for holiday destinations, with Saudi Arabia and Egypt experiencing a more than threefold increase in flight bookings. Similarly, countries like the United Arab Emirates, Turkey, and Qatar saw a surge of over 50 percent in flight bookings. In Europe, popular destinations such as the UK, Hungary, Ireland, Spain, and Croatia witnessed a doubling of air ticket bookings, according to Qunar data. Meanwhile, with the Japanese yen hitting a 34-year low against the dollar on Monday, Japan has attracted large numbers of overseas tourists including Chinese visitors. According to Ctrip, Japan will be the top destination for outbound travel during the May Day holidays, with Thailand and South Korea following closely behind. Airbnb data also indicates that Japan is the most searched destination. According to Qunar, the top 10 destinations for the May Day holidays are Thailand, Japan, Malaysia, South Korea, Singapore, Indonesia, Vietnam, the US, the Philippines, and Australia. Bookings for flights to Japan saw a significant increase of over 60 percent compared with the same period in 2019, making it the destination with the largest growth among the top 10. The rise in outbound travel has been facilitated by a surge in international flights. China Southern Airlines announced plans to add over 900 flights from April 30 to May 6, with total planned operation of nearly 19,000 flights. China Eastern Airlines has also expanded its international and regional routes, including flights from various Chinese cities to destinations such as Thailand, Singapore, Japan, and Russia, among others. Global Times

Global hot tourist destinations will welcome a large number of Chinese tourists during the upcoming May Day holidays ...

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Chinese Tourists Are Again Embracing International Travel

More than a year since China reopened its borders, some 63 percent of its residents say they’re ready to return to exploring the world, according to a survey published on Wednesday, which Bloomberg previewed. They plan to venture further afield than previously, with just 10 percent spurning international travel altogether — a significant shift from a year ago, when more than half of China’s consumers said they had no plans to go abroad and 31 percent said they weren’t even interested.

The return of China’s travellers has long been awaited in the travel industry, which is expected to surpass pre-pandemic levels this year by contributing $11.1 trillion to the global economy. The March 6–19 survey by marketing solutions firm Dragon Trail International queried 1,015 mainland Chinese leisure travellers located in 127 places, including first-, second- and third-tier cities.

“We are now past the initial reopening and well into recovery,” says Sienna Parulis-Cook, Dragon Trail’s director of marketing and communications, “and we can see that travellers are much less hesitant about venturing outbound than they were a year ago.”

As of early April, outbound trip bookings for China’s weeklong May holiday lagged 2019 levels by only 13 percent, according to Dragon Trail, and included such places as Egypt and United Arab Emirates. The China Tourism Academy predicted that global Chinese tourist numbers will reach 130 million in 2024 — 84 percent of levels before the pandemic struck. In 2019, some 155 million outbound Chinese travellers spent $253 billion abroad.

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Destinations that have either waived the visa process for Chinese citizens or are offering electronic visas on arrival include Singapore, Malaysia, Thailand, and the Middle East and North Africa. The United Arab Emirates, Egypt and Jordan are predicted to lead the recovery in Chinese tourism, says Alina Xiang, who specialises in China as president and chief executive officer of East West Marketing.

Australia, the United Arab Emirates, the UK, Italy, New Zealand, Turkey, Qatar and Egypt are among the destinations whose flight capacities with China surpass levels before the pandemic, according to data from the Civil Aviation Administration of China that was provided by East West Marketing.

Dragon Trail’s survey shows that of 181 respondents who say they’ve already made overseas travel plans, 94 percent have booked trips to more than one destination. Some 16 percent said they would head to Europe.

Shopping is on the agenda for many. Nearly one-fourth said they will budget from $5,000 to $10,000 for shopping per trip, with 16 percent saying they would spend more. “It’s a really an important part of the Chinese outbound travel experience,” says Parulis-Cook. Retailers have suffered without such high-spending Chinese tourists.

In the first quarter, LVMH Moet Hennessy Louis Vuitton SE reported, “Chinese demand for fashion and leather goods — at home and abroad — rose almost 10 percent,” a bright spot in an otherwise-underwhelming performance.

The US travel industry is in for a longer wait than other major tourist destinations when it comes to reaping rewards from Chinese travel. Amid delays in visa issuance, first-quarter flights between the US and China remained 78.8 percent below those in the same period in 2019, according to data provided by aviation analytics firm Cirium. This contrasts with a near rebound for flights between the US and the rest of Asia, just 4 percent below pre-pandemic levels.

Still, Chinese travellers’ poor perception of the US has changed significantly since the pandemic. In 2021, 87 percent said they considered the US an unsafe tourist destination. In March, only 36% voiced that perception.

By Lebawit Lily Girma

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China’s Golden Week Holiday: What’s Driving Outbound Travel

Peden Doma Bhutia , Skift

April 24th, 2024 at 3:30 AM EDT

Understanding what Chinese travelers want is crucial for stakeholders in the tourism industry to tailor offerings and experiences that match these changing preferences.

Peden Doma Bhutia

Destinations in the Middle East are emerging as favorites for China’s upcoming May Day holiday, commonly known as Golden Week.

Overall outbound travel from China during this year’s holiday is still lagging behind 2019 levels by 13%. But travel to the United Arab Emirates (UAE) has surged by 66%, and Turkey has experienced a significant growth of 56%, according to ticket sales data from ForwardKeys.

Increased seat capacity from Africa and the Middle East, which is set to expand by 75% in the second quarter, has led to this surge in travel.

Corresponding increases in seat capacity to China have backed the travel growth rates of 56% to Turkey, 19% to Italy, and 12% to the UK.

Last month, Trip.com, China’s biggest online travel agency, announced record bookings in Abu Dhabi, exceeding 57,000 room nights over the past 12 months. From 2022 to 2023, outbound travel orders across all products from Chinese travelers to the UAE surged by more than threefold.

Chinese outbound travel to Middle East had already reached pre-pandemic levels during the Chinese New Year period in February.

Pre-Pandemic Travel Patterns

ForwardKeys anticipates that the May holiday will witness notable travel peaks around April 27 and May 1, closely resembling pre-pandemic travel patterns.

In the Asian region, Malaysia has emerged as the top-performing destination for Chinese travelers, with flight bookings currently 42% ahead of 2019 levels. Because of more lenient visa policies, including visa-free travel to Malaysia and Singapore, and streamlined procedures for South Korea, travel to these destinations is expected to surpass 2019 levels in May.

These findings align with insights from Dragon Trail’s Chinese Traveler Sentiment Report , releasing later on Wednesday. According to the report, visa-free policies, direct flights, and simplified application procedures are also making outbound travel more appealing and accessible.

According to ForwardKeys, a notable shift in passenger profiles is the decrease in group travellers, which has dropped by 53% compared to 2019 levels. In contrast, solo travellers are showing a strong interest in exploring Asian destinations, with a 9% increase.

The Dragon Trail report also highlights growing preference for independent travel among Chinese tourists. Travelers also prefer, semi-self-guided travel and boutique groups of 6-10 people, which offer flexibility and convenience.

Value-Oriented Approach

Along with flexibility and convenience, Chinese travelers are also seeking relaxation and comfort in their trips.

Amidst the challenges posed by the Covid-19 pandemic and China’s economic downturn in 2023, Chinese travelers are prioritizing relaxation and comfort in their trips.

The economic pressures have led to a value-oriented approach to travel planning, with a majority carefully considering their spending to maximize value and opting for affordable travel options.

Around 20% of respondents who said they would not travel outbound in 2024 cite limited income as a barrier. Only a small percentage (11%) are willing to pay a premium for superior products and services.

Most travelers allocate less than 20% of their income for travel, with budgets typically ranging from RMB10,000 to RMB30,000 for upcoming trips.

Despite budget-consciousness, shopping remains an integral part of outbound travel, with more than two-thirds of travelers spending a minimum of RMB2,000 (US$276) per trip. Local foods and souvenirs are the primary shopping categories, followed by cosmetics, clothing, shoes and bags.

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Tags: asia monthly , budget travel , china , china outbound , golden week , middle east , shopping , turkey , uae

Photo credit: Overall outbound travel from China during this year's May holiday is 13% behind 2019. Florence Lo / Reuters

Chinese Tourists Fuel Travel Bookings Far and Wide During 2024 May Golden Week

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• Outbound travel bookings during the five-day holiday jump 100% YoY: Fliggy data
• Chinese tourists search for localized and authentic experiences at home and abroad

Chinese tourists pose in a field of canola flowers. Photo credit: Getty Images

Chinese tourists are taking to the road and air this week in droves for the five-day May Golden Week holiday, data from Alibaba Group’s travel platform Fliggy and navigation app Amap reveals.

The vacation period, which starts on China’s Labor Day on 1 May, will see millions of people across the country travel near and far to explore and relax with friends and family.

Outbound travel bookings during the holiday in 2024 doubled year-on-year, according to Fliggy , with cruises, car rentals and independent travel plans driving demand. 

Regional tourism stalwarts like Japan, Thailand, South Korea and Australia accounted for a large portion of outbound bookings, but destinations as far afield as Brazil and Turkey also registered an uptick in interest.

Likewise, domestic travel over the upcoming May Golden Week looks set to smash pre-pandemic records as Chinese tourists explore folk culture across the country.

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Bookings for tours in China doubled compared with the same period in 2019, according to Fliggy, as domestic tourists plan to visit popular destinations, including Shanghai, Beijing, Chengdu and Wuhan.

Car rentals have also surged five-fold on the platform for the holiday period. Amap predicts traffic peaks on the morning of 1 May and the afternoon of 5 May as travelers depart and return from their adventures.

Go ing Further for Less

Overseas travel is becoming more affordable, making it easier for Chinese travelers to expand their horizons. 

The average price per person for international air tickets dropped by 19% year-on-year for flights during the May Day holiday period, according to Fliggy.

“Air tickets are much cheaper than last year, and there is a wider choice of overseas travel destinations,” said a Beijing-based Fliggy user surnamed Wang, who plans to travel with her family during the upcoming holiday.

Travel by boat is also making waves among Chinese consumers, the platform’s booking data shows. 

The number of outbound cruise packages booked through Fliggy during the upcoming holiday has increased by more than 16 times year-on-year.

Chinese Tourism Over New Year 2024 Takes Off As Prices Drop: Fliggy Report  

Tailor-made travel.

Chinese tourists are increasingly taking to the road solo or in smaller groups to explore destinations at their leisure and immerse themselves in local culture, booking data shows.

Group outbound bookings have declined compared with last year, while independent travel continues to rise, according to Fliggy. The platform ranks first in the outbound independent travel sector with a market share of 39.4%, per market researcher Fastdata.

Within China, consumers’ growing preference for authentic local experiences, often accessed via rental car trips, has stoked interest in heritage tourism.

Many domestic tourists who visit historical sites such as Hangzhou’s UNESCO-listed West Lake or Chongqing’s ancient Shibati neighborhood enjoy dressing up in hanfu, clothing traditionally worn in past centuries by the Han.

Their dress may be old-fashioned, but these tourists will rely on Amap’s high-tech travel planning tools to beat an expected surge in crowds and traffic jams.

The platform predicts West Lake will be the most popular scenic spot for independent travelers during the May Golden Week and has shared alternate routes to avoid highway congestion.

Discover more stories from China’s tourism sector 

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Beyond Economics: How U.S. Policies Can Undermine National Security Goals

Photo: Alex Wong/Getty Images

Table of Contents

Report by Thibault Denamiel , Taylar Rajic , William Alan Reinsch , James Andrew Lewis , and Julia Brock

Published May 3, 2024

Available Downloads

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Introduction

Gaining and maintaining leadership in technology and innovation is set to be a key feature of global competition throughout the twenty-first century. With today’s intermingling of economic competitiveness and defense, staying ahead of the technology curve is a cornerstone of national security. The United States, to further its geopolitical interests and maintain a strong domestic economy, must approach every aspect of economic and trade policy through the lens of global technology competition.

U.S. secretary of state Antony Blinken stated that the administration under President Joe Biden has  recognized that technology “is profoundly a source of national strength.” Renewed government investment and tightening rules around cross-border technology transfers reflect an understanding of the sector’s significance to global competition. Nevertheless, while the administration has promoted large-scale investments in U.S. critical and emerging technology (CET) capabilities, some of its current economic and trade policies are undercutting the U.S. technology sector’s potential and undermining the country’s long-term national security interests. The administration’s current approach to antitrust also discounts the landscape of competition between China and the United States and may jeopardize U.S. advancements in emerging technologies, which could cede the advantage to China and other foreign competitors. 

In this paper, the authors aim to shed light on the principal policy shortcomings that hobble the United States’ ability to remain a leader in technology innovation and production. The paper highlights several areas of improvement, including ongoing antitrust cases, digital trade and competition policy, industrial policy guardrails, and novel economic security measures around CETs. It also identifies concrete pathways to address these issues. 

How the U.S. Tech Ecosystem Supports the Country’s National Security Apparatus

U.S. technological leadership is an essential element of the nation’s superpower status. The country’s ability to remain ahead of the global race for scientific and industrial advancements is a cornerstone of its national security.  Semiconductors , along with a range of other cutting-edge technologies, are the crucial drivers of every major U.S. defense system or platform. The  2022 National Defense Strategy recognizes that expeditious and widespread adoption of commercial technologies by the military is paramount and the Defense Innovation Unit (DIU) stated in a  2022 report that it is critical “to gain and maintain operational advantage over competitors,” and the DIU has recently adopted commercial solutions for everything from satellite maneuverability to pilot simulation training. As with many elements of the defense industrial base, the government relies on private businesses to develop and manufacture these critical technologies. For example,  Advanced Micro Devices and  Intel lead the world in producing field-programmable gate arrays (FPGAs)—circuit technologies with a wide range of defense applications in sensing, electronic warfare, and data security. Semiconductors for F-35 fighter jets are produced by BAE Systems in New Hampshire, the recent recipient of a  $35 million CHIPS and Science Act grant. 

The United States maintains its leadership through robust research and development (R&D) efforts in both the public and private sectors. Prominent rankings show the United States is home to three of the top five globally renowned  research universities and approximately 1,000  venture capital firms . In addition, the Department of Energy operates 17  national laboratories . Another ranking shows 81 of the world’s largest  technology companies are based in the United States, far outpacing any other nation, with China having only one company (Tencent Holdings) in the top 20. In the race for tech innovation, the United States has clearly maintained its position as the global leader. But with technological advancements and increased competition with China in emerging tech, such as quantum and artificial intelligence (AI), federal policy must be assessed regularly to ensure the United States can spur the entrepreneurship and R&D efforts foundational to the strength of the country’s tech sector. Since the 1990s, the private sector has been the primary driver of this innovation,  surpassing federal investments in technology. In 2021, U.S. businesses invested  $591 billion in R&D, accounting for 74.9 percent of the national total investment in R&D for that year. The federal government’s share of national R&D investment for 2021 was just $147.5 billion, or 18.7 percent of the national total.

Advancements in technology have helped the United States become a superpower. Investments in aerospace and defense technologies have established superior U.S. military capabilities and have underpinned U.S. power globally for decades. Technological advancements made before the Persian Gulf War had a  transformative impact on the use of technology in warfare, including satellite surveillance systems, the Global Positioning System (GPS), and information technology for reconnaissance, surveillance, and intelligence gathering. Deployment of these technologies transcended their use on the battlefield to become essential in everyday life both in the United States and abroad. 

Now, CETs are becoming a focus for foreign policy because they promise to transform both how economies grow and how nations defend themselves. The U.S. technology sector’s ability to innovate and flourish is directly tied to the country’s ability to ensure its national security. The U.S. technology sector plays an essential role in providing both hardware and software to the national security community. Tech giants like Amazon, Microsoft, and Google provide digital infrastructure such as cloud security and updates to legacy federal systems to promote a safe and secure online environment. Amazon Web Services (AWS) offers cloud computing services, such as  GovCloud , designed to meet strict security thresholds to national security agencies that need to host sensitive data and applications in the cloud.  IBM also provides a cyber response training facility in Washington, D.C., aimed to improve incident response capabilities to protect federal systems. Federal civilian networks require secure and reliable information technology systems to safeguard data that ensure national security and contain the private information of millions of U.S. citizens. Critical infrastructure, another key component of safeguarding national security, relies heavily on a robust digital infrastructure to protect the daily functioning of key critical sectors. 

Policy Areas

The United States, to preserve its edge in the current technology competition with China, needs to maintain its strong innovation ecosystem. The question of antitrust is at the center of the policy debate over how to encourage innovation. Now there are growing concerns that overregulating U.S. tech companies will stifle the innovative culture that makes the United States a global technology leader.

Now, CETs are becoming a focus for foreign policy because they promise to transform both how economies grow and how nations defend themselves. The U.S. technology sector’s ability to innovate and flourish is directly tied to the country’s ability to ensure its national security.

The  Sherman Act ,  Federal Trade Commission Act , and  Clayton Act —the core U.S. antitrust statutes intended to regulate business practices to promote competition and protect consumers—are enforced by the Federal Trade Commission (FTC) and Department of Justice (DOJ). Recent antitrust lawsuits by the  DOJ and  FTC reflect growing concern in those agencies and among some analysts about monopolization in the U.S. technology industry and the potential effects this could have on innovation. 

Through recent  lawsuits , the FTC is attempting to address alleged illegal monopolies and companies’ desire to harness emerging technologies solely to their benefit. The FTC argues that issues around  self-preferencing of products and applications, for example, have allegedly blocked competitors from entering the digital services market. FTC chair Lina Khan  expressed her skepticism at the concept of tech “national champions,” citing the failures of Boeing as an example where lack of competition disincentivized the company to spend on improving safety and innovation. She has also cited the FTC’s  blocking of Lockheed Martin’s acquisition of Aerojet Rocketdyne as a strategy to maintain fair competition in a sector critical to national security and defense. These concerns are now being aimed at the tech sector for its role in maintaining a critical line of defense in national security and ensuring an environment of competition remains to promote innovation and enrich the market. Khan’s critiques, however, have also been brought into  question for their validity and whether they demonstrate lack of understanding of national security considerations and market dynamics. Her efforts are part of a larger antitrust effort by the Biden administration to mitigate what it sees as regulators’  failure to reign in the rise of Big Tech. 

DOJ has raised similar concerns in its investigations of  Apple , aimed at the company’s market control in both its software and hardware, which DOJ views as anticompetitive. Apple controls approximately  58 percent of U.S. smartphone sales and has a significant share of the mobile app market. The mobile app market is effectively a duopoly between Apple and Google, which have dominated by defaulting their app stores to their respective smartphones. These issues were highlighted in the  European Union’s actions to fine Apple for banning app developers from offering cheaper subscriptions to customers who want to use their services outside Apple’s App Store. Japan’s antitrust regulators have also maintained that there is a  clear duopoly of the mobile app market, that developers can create iOS apps only by selling them through the App Store, and that consumers rarely switch platforms due to familiarization and self-preferencing. Efforts by Apple’s competitors and  lawsuits in the United States also emphasize the concern that the App Store is designed to completely shut out competition.

As high tech becomes an increasingly important part of U.S. national defense and as China’s competitive challenges grow, it is important to take a close look at how other federal government efforts impact U.S. national security, including attempts by the FTC and DOJ to regulate Big Tech. Although in the past these national giants have been at the forefront of U.S. technological innovation, greater scrutiny of their R&D spending and practice surrounding patent numbers, and whether this is reflected in product advancement and output, is needed to ensure the market remains competitive—an instrumental part of keeping the U.S. tech sector a step ahead. The most common metrics for measuring the success of innovation are patent holdings and R&D spending; Big Tech generally leads the pack in both.

Some  argue that these FTC and DOJ actions are targeting the wrong industries and that Big Tech is both competitive and innovative. Amazon spent the most of any U.S. company on R&D ( $73.2 billion ) in 2022, followed by Alphabet, which spent $35.9 billion. Big Tech also has a commanding lead when it comes to new patents. IBM holds the most  patents in the United States. Other companies, such as Amazon, Google, Apple, and Microsoft, also promote innovation by rewarding employees with in-house  patent recognition programs , regardless of whether the patents are approved or not. 

Despite Big Tech clearly leading the U.S. government in both R&D spending and patent holdings, there is some  concern this could be stifling innovation.  One study suggests that when start-ups see the prospect of acquisition from larger firms, their innovation decreases despite having more access to funding, which could be stifling bolder ideas in order to take a safer approach that appears more profitable to potential investors and start-ups hoping to be bought out. However, breaking up Big Tech through an antitrust approach raises the question of whether the United States has the potential to innovate more   than under its current model, which has so far proved very strong. It remains to be seen what effects of pending litigation and mixed public opinion on these issues have on efforts to break up Big Tech and if decades of technological innovation amount to less than hypothetically what could have been achieved with more domestic competition.

Competition with China 

China, the primary U.S. competitor, directly supports its national giants and has helped them become globally competitive. China began  strengthening its defense technology base in the 1980s and 1990s by investing in research and technology firms, investing in its tech workforce, and engaging in commercial espionage and  intellectual property (IP) theft . These strategies continue to mark how China conducts business with Western commercial firms. Today, despite the United States maintaining an established global position in technology development, an Australian think tank claims (using debatable data) that China  leads the world in developing 37 out of 44 CETs and has promoted policies to drive further innovation and promote  technology independence from the West. Despite these claims, the United States is clearly established as a global leader in technological innovation; what remains to be seen is how treatment of the U.S. domestic technology base and national giants will affect this position with China’s approach to subsidizing its tech industry. 

China’s government supports its technology giants—including Huawei, SMIC, Alibaba, Tencent, and ZTE—to modernize and strengthen its commercial and defense sectors. China’s  New Generation AI Development Plan and its  Made in China 2025 plan are part of China’s goal to invest in domestic innovation to develop technological self-reliance and compete with Western tech industries. In 2019, China  supported Huawei through loans from national banks, and in 2022, China’s estimated state financial support for Huawei alone was  $75 billion . The Chinese government also  invested $40 billion in state funds to boost the country’s domestic semiconductor market in 2023.

In addition to government funding, China has used regulatory tools to promote independence from Western services and strengthen its tech companies. In 2021, for instance, Beijing issued new rules  regulating internet platforms after China’s State Administration for Market Regulation (SAMR) fined Alibaba  $2.8 billion or anticompetitive behavior, and it  updated its Anti-Monopoly Law in 2022 . China’s antitrust regulatory body is starkly  different from that of the United States. Antitrust regulators in China are rarely challenged in their rulings. Further, antitrust agencies often follow the directives of the central government, and regulatory authorities are afforded a greater deal of flexibility. By contrast, any U.S. antitrust ruling would likely take several years to litigate. The long-term effect of China’s antitrust policies on Chinese tech innovation remains to be seen, and increasing political strictures by the Chinese Communist Party may hamper innovation in China. Nevertheless, thus far, its approach has helped strengthen the country’s technology innovation ecosystem vis-à-vis   the United States. 

Breaking up U.S. national champions—large companies that have become synonymous with U.S. know-how and support the country’s greater national security interests—or unnecessarily limiting their ability to invest and innovate could limit U.S. ability to lead globally in emerging technologies like AI and quantum tech, leaving the country at risk of ceding this leadership position to China. Currently, the seven largest  AI companies by market share are U.S. companies, including Alphabet, Microsoft, and Meta. The four leading global  quantum companies are also U.S. national giants, including Google, Microsoft, and Amazon. The United States is leaning on national champion tech companies to pioneer development and commercialization of these technologies. Given China’s increasing  competitiveness in the tech sector, hobbling or breaking up these companies could set the United States back in its tech development competition with China. 

Digital Policy

Competition Policy

The United States, unlike many economic partners and competitors, has not defined a clear policy on digital competition. The most assertive push from Congress in addressing the issue came after a  16-month investigation by the House Judiciary Committee’s Subcommittee on Antitrust, Commercial and Administrative Law, which ended in 2020. The investigation yielded five bills aimed narrowly at regulating technology companies, none of which became law. Several like-minded bills were introduced in the Senate, yielding similar results. The Klobuchar-Grassley  American Innovation and Choice Online Act ,  for instance, would give federal antitrust agencies the authority to issue civil penalties and injunctions against online platforms (“covered platforms”) (1) with at least 50 million monthly active users (or 100,000 business users), (2) with an annual market capitalization or U.S. net sales exceeding $550 billion, and (3) serving as a “critical trading partner” for its business users.

Breaking up U.S. national champions or unnecessarily limiting their ability to innovate could limit U.S. ability to lead globally in emerging technologies like AI and quantum tech, leaving the country at risk of ceding this leadership position to China.

As Congress has been unable to pass meaningful legislation on digital competition, federal agencies have begun to chart their own path. Defining a U.S. approach that would adequately protect consumers at home and abroad while ensuring fair treatment for providers has therefore been problematic. The absence of a clear policy slows the development of a stable digital ecosystem in the United States.

This gap in policymaking creates two issues that speak to the importance of U.S. leadership in this space. First, it cedes first-mover advantage to other governments around the world that are free to decide the rules of a sector, which inherently have extraterritorial implications. Chief among them is the European Union’s Digital Markets Act (DMA). The act identifies digital services that fall under its purview, defines characteristics that make a service provider a gatekeeper, creates rules and ex ante obligations for those gatekeepers, and establishes punishments if those obligations are not met. A previous  CSIS study showed that EU regulations in the tech sector, such as the DMA and Digital Services Act, among others, would cost U.S. service providers an estimated $22–$50 billion in compliance. 

Secondly, the absence of congressional action leaves U.S. states to chart their own path in this sector. In 2023 alone, seven state legislatures introduced competition-related legislation, continuing the trend of states attempting to tighten regulation in the digital space. These state-level efforts, in turn, may present additional challenges to ensuring federal leadership on the issue, which is necessary to guarantee that policies supporting the homegrown tech sector are designed and implemented with a whole-of-nation approach. A consortium of subnational policies, moreover, may increase the  regulatory burden for tech actors, which, instead of abiding by a single law at the federal level, must simultaneously meet various sets of standards across states—not all of which are compatible.

Given the lack of direction, some parts of the Biden administration have pursued policies that undercut the interests of U.S. champions, while others have risen to these champions’ defense. In December 2021, U.S. Secretary of Commerce Gina Raimondo  expressed “serious concerns that these proposals will [the DMA would] disproportionately impact U.S.-based tech firms.” Later, the Department of Commerce  formally lobbied the EU Parliament in a letter sent in February 2022, calling on lawmakers to “use scoping criteria that do not discriminate against U.S. firms.” In the 2023 National Trade Estimate (NTE), U.S. trade representative (USTR) Katherine Tai  classified the DMA as a barrier to digital trade. Administration officials even sent a  letter of protest to Brussels in early 2022, objecting to the DMA’s targeting of U.S. companies and potential effect on technological innovation.

Despite these condemnations, the FTC and DOJ have worked closely with the European Commission via the  U.S.-EU Joint Technology Competition Policy Dialogue (TCPD) on DMA implementation. Both agencies have sent officials to the European Union to assist with the process. This support from parts of the Biden administration is encouraging the implementation and enforcement of digital competition policies that disadvantage U.S. providers by imposing discriminatory compliance requirements. 

Altogether, it appears the administration’s progressive wing has taken the reins on digital competition policy. Secretary Raimondo, after becoming isolated over her opposition to the DMA,  fell silent on the issue. This shift has been most evident in USTR’s 2024 NTE, which  narrows the definition of trade barriers by defining them as “government measures that unduly impede the international exchange of goods and services,” instead of the previous year’s broader definition, which characterized any government action that restricts trade, U.S. investment, or cross-border data flows as a barrier. In addition, the new NTE drops several restrictions on the cross-border transfer of data present in the previous year’s estimate and makes no mention of the DMA, which was included in earlier versions.

Digital trade is another area where the administration’s internal disputes have put the United States at a disadvantage in plurilateral negotiations. In late October 2023, USTR suddenly  withdrew U.S. support for digital trade negotiating objectives in a meeting of the Joint Statement Initiative (JSI) on Electronic Commerce at the World Trade Organization (WTO). These objectives include protection of cross-border data flows, prohibition of data localization mandates, and safeguarding of source code from forced disclosure to foreign governments. Given the importance of the WTO JSI in safeguarding U.S. interests in this sector and the negotiation’s significance to economic allies and partners, USTR’s withdrawal represents a significant setback in establishing rules in the e-commerce space, which will likely incur significant costs to U.S. tech firms aiming to grow abroad. 

Digital trade negotiations have also suffered setbacks in U.S.-led forums. In November 2023, following the WTO JSI withdrawal, USTR  suspended talks on some key digital trade aspects of its Indo-Pacific Economic Framework (IPEF) initiative. As with the WTO talks, the suspensions conflict with previous digital trade accomplishments enshrined in the United States-Mexico-Canada Agreement on trade, as well as the more recent U.S.-Japan Digital Trade Agreement ,  supporting the aforementioned U.S. policy objectives on data flows, localization mandates, and source codes disclosures. These failures in negotiating digital trade rules create an uneven terrain in which U.S. tech champions will need to abide by different—and potentially protectionist—standards of e-commerce that will limit their ability to conduct business. 

Industrial Policy

The Biden administration’s championing of industrial policy to spur technological advancements and support production of CETs represents a monumental shift in U.S. economic policy. The semiconductor sector exemplifies the U.S. government’s turn to state-led investments. The CHIPS and Science Act allocates roughly  $200 billion for public sector entities like the National Science Foundation and Department of Energy. On the private side, the CHIPS for America fund alone will provide roughly $50 billion over five fiscal years to  subsidize investments in semiconductors using a competitive grant process. Under the fund, $39 billion  will go toward general subsidization of investments that develop domestic manufacturing capability, and the remaining $11 billion will go toward advanced semiconductor R&D. Likewise, an advanced manufacturing investment tax credit  creates a 25 percent investment tax credit for investments in semiconductor manufacturing and includes incentives for the manufacturing of semiconductors, as well as for manufacturing of the specialized tooling equipment required in the semiconductor manufacturing process. In addition to the federal government’s efforts, several states have created analogous incentive programs for drawing investment. For instance, Ohio has  announced “$2 billion of state grants, credits, and incentives to construct a new semiconductor manufacturing plant in Ohio.”

These failures in negotiating digital trade rules create an uneven terrain in which U.S. tech champions will need to abide by different—and potentially protectionist—standards of e-commerce that will limit their ability to conduct business.

The new U.S. turn to industrial policy to support critical sectors, including technology, could unlock capital to ensure the country remains ahead of the global competition, but it also creates novel roadblocks. For one, large industrial policy packages risk fraying relationships with allies and economic partners who believe the United States may be breaking the rules governing world trade to give domestic champions unfair advantages. Related to this issue is the potential for a spiraling subsidy war: as with other government-led investments, large U.S. government packages in the tech sector threaten to provoke a global subsidy race making nations’ cash infusions in the relevant sectors increasingly inefficient. The European Union has already responded to the United States with its own  European Chips Act , a piece of legislation that aims to boost the continent’s semiconductor production from 10 percent to 20 percent of global capacity by 2030 and will allocate over €43 billion ($45.9 billion) toward chips until 2030. Moreover, aside from trade rules considerations, U.S. incentives may also run counter to other types of U.S. multilateral engagement. For instance,  global minimum taxation standards enshrined in Pillar Two of the Organization for Economic Cooperation and Development (OECD) currently expose companies aiming to take advantage of the R&D tax credit to a top-up tax equal to the difference between Pillar Two’s threshold and their tax rate—partially negating the incentive’s ability to spur innovation.

Another hurdle to effective industrial policy is current local and federal environmental regulations that hinder building manufacturing centers critical to emerging technologies—such as semiconductor fabrication plants, or fabs. While these regulations may be necessary to lower the environmental impact of proposed facilities—semiconductor facilities require large amounts of energy and fresh water and can produce several tons of hazardous waste every year—processes to secure governmental permits are both time-consuming and expensive. The President’s Council of Advisors on Science and Technology  found that the permitting process can take 12–18 months for large fab projects. Semiconductor fabs are also required to undergo an environmental assessment under the National Environmental Policy Act. If the assessment determines the project will have a significant environmental impact, then it must also go through an impact statement process. According to the  Council on Environmental Quality , these take an average of 4.5 years to complete. These potential delays, which China’s authoritarian system can avoid, hinder the United States’ ability to undertake large-scale projects to enhance the production of CETs. The tech sector moves at a brisk pace, and lengthy timelines can have profound security and economic implications. Responsible acceleration of the permitting process for goods critical to national security through the creation of a dedicated fast-track process would mitigate issues associated with lengthy timelines and allow the United States to ensure its position as a leader in tech manufacturing.

The new U.S. turn to industrial policy to support critical sectors, including technology, could unlock capital to ensure the country remains ahead of the global competition, but it also creates novel roadblocks.

Lastly, the U.S. turn to industrial policy exacerbates a problem that has already been a barrier to long-term U.S. economic growth—namely, worker shortages. Sustained government spending significantly increases demand for labor in targeted sectors, creating jobs the country simply does not have enough people to fill. A  recent study by Deloitte revealed the labor shortage in the U.S. semiconductor industry could reach up to 90,000 workers over the next few years. Issues arising from a lack of specialized workers have already been evident from Taiwan Semiconductor Manufacturing Company’s (TSMC)  difficulties in building a  $40 billion fab in Arizona. Industrial policy packages promoting the U.S. tech sector can work only if there are enough workers to support them. Barring stark changes in U.S. workforce development capabilities or immigration policy, labor is set to remain  insufficient . 

Economic Security Measures

The Biden administration has also had to confront the increasing intermingling of economics and national security in its policy development. Once two parallel tracks, they now complement each other in the eyes of the U.S. government: economic statecraft tools support national security measures, and prosperity is defined by resilience. This turn has led to a significant expansion in tools at the disposal of the U.S. government, which, whether warranted by rising geopolitical tensions or not, are set to curb U.S. companies’ ability to grow. Expanded export control rules, outbound investment screening mechanism proposals, and an executive order on data flows will transform the U.S. tech sector, building up barriers and limiting firms’ ability to access the foreign markets they need to continue to grow. 

Export Controls

Recognizing the national security threats posed by China’s access to advanced technologies, including chips and the AI capabilities they support, the Biden administration has significantly expanded export control rules on semiconductors. On October 7, 2022, the Bureau of Industry and Security (BIS) issued rules meant to curtail the sale of chips and certain related technologies to Chinese firms. The rules spell out  nine new actions , including the addition of advanced chips and manufacturing equipment items to the Commerce Control List (CCL) and the restriction of U.S. persons’ ability to support the development or production of integrated circuits at certain semiconductor fabrication facilities located in China. On October 17, 2023, BIS  announced revisions meant to address gaps in the previous year’s controls. The revisions change the thresholds for which chips are covered by making performance density the primary parameter of interest, subject  43 additional countries to expanded licensing requirements to combat circumvention via third-party nations, include additional manufacturing tools to the list of controlled equipment, and blacklist 13 Chinese AI firms deemed to threaten U.S. national security. An initial issue with the expanded controls lies in the Department of Commerce’s limited enforcement capacity. The significant expansion of control rules without the commensurate expansion of BIS enforcement capabilities threatens pervasive circumvention, putting legitimate U.S. firms that abide by the new rules at a disadvantage. While BIS has already expanded its enforcement capabilities, with a fiscal year 2023 budget that increased by $50 million over the previous year, additional rules and personnel should be accompanied by increased investment in the agency. CSIS has already  argued that data-driven digital technologies using AI and machine learning can and should play an integral role in enhancing BIS export control enforcement capabilities.

Expansion of semiconductor export controls presents a central dilemma for U.S. economic security policymaking: China is both the greatest long-term threat to national security and the largest customer for U.S. businesses. Depending on how the Department of Commerce handles licensing, U.S. and allied chipmakers are set to forgo a large amount of revenue by having their access to the Chinese market curtailed. From 2016 to 2020, financial filings of top U.S. chip companies show they derived roughly a third of their net revenue from sales to China. Lam Research, Applied Materials, and KLA have  provided negative growth guidance for the quarter ending in June 2023 after warning they could stand to lose up to $5 billion worth of revenue from China in 2023 from the chip controls. 

Aside from potential revenue losses, U.S. and allied chip firms also face the threat of being designed out of the semiconductor supply chain by China’s homegrown champions, as well as third-country firms. Beijing has responded to sweeping U.S.-led semiconductor export curbs against China by seeking to “ de-Americanize ” its chip sector. One such design-out pathway China is pursuing includes leveraging advanced packaging techniques to develop chiplets, which may offer a route for producing high-performance chips not dependent on the astronomical investment to produce smaller chips. In addition, other countries may soon be able to fill the gaps left by U.S. and allied semiconductor firms. 

If the United States ignores the design-out developments resulting from U.S. export control policy, Washington may find its semiconductor curbs increasingly irrelevant and subject to circumvention. This threat risks undercutting U.S. innovation in semiconductors, diminishing U.S. alignment with allies and partners on high technology, and propelling China’s chip ambitions. Both revenue and design-out should also be taken into consideration as the U.S. government evaluates other export curbs on CETs—such as quantum technologies, in which China is already  out-investing (and potentially out-competing) the United States. 

Outbound Investment

The Biden administration’s economic security policies have led to development of a brand-new tool intended to protect long-term U.S. interests by curbing China’s access to emerging dual-use technologies. In early August 2023, President Biden signed  Executive Order 14105 to address “U.S. investments in certain national security technologies and products in countries of concern.” The order directs the Treasury secretary to establish an outbound investment screening program for three types of sensitive technologies: (1) semiconductors and microelectronics, (2) quantum information technologies, and (3) AI. In the order’s annex, the president specifically identifies China, along with Hong Kong and Macau special administrative regions, as a country of concern—highlighting the idea that the mechanism is aimed squarely at tackling national security threats emanating from China. 

The mechanism’s implementation is still being developed. Per the Department of the Treasury’s  advance notice of proposed rulemaking (ANPRM), covered transactions—a blanket term that applies to both prohibited and notifiable transactions—would include large-scale investments such as mergers and acquisitions , private equity, venture capital, greenfield, joint ventures, and certain debt financing schemes. Within semiconductors, the Department of the Treasury is considering banning investments in Chinese entities engaged in advanced design or manufacturing while simply requiring notification for less sophisticated integrated circuits. When it comes to quantum technologies, the Department of the Treasury is also  considering banning investments in all identified subsets: quantum computers and components, certain quantum sensors, and quantum networking and networking systems. The ANPRM outlines a notification requirement for investments in AI systems with national security applications and is requesting comments on how to shape prohibitions for certain AI systems whose sole use is for military, intelligence, or surveillance purposes. 

Given China’s civil-military fusion doctrine, better monitoring of U.S. investments in the country will likely support policies designed to promote national security. Despite geopolitical tensions exerting downward pressure on U.S. investors’ enthusiasm for China, the country remains a top destination for U.S. capital. In 2022, U.S. venture capital firms were involved in almost  600 deals in China, totaling roughly $14.5 billion in value. Given investors’ declining yet certainly extant interest in China, the ability to ban transactions should be exercised lightly to avoid denying the private sector growth opportunities that do not adversely impact U.S. national security. In addition, detractors of an outbound investment screening regime argue that multilateralizing the instrument, a key step for effective economic security measures, would be an uphill battle—though the European Union has recently considered taking a similar step. Given the Chinese government’s willingness to subsidize critical industries, a mechanism curbing U.S. investment could simply change Chinese firms’ financing sources rather than diminish their ability to acquire funding altogether. 

Data Security Executive Order

On February 28, 2024, the White House issued an Executive Order on Preventing Access to Americans’ Bulk Sensitive Personal Data and United States Government–Related Data by Countries of Concern, which aims to curb cross-border transfers that pose “an unacceptable risk to the national security of the United States.” The new Biden administration policy aims to  tackle a gap in national security policy as entities or countries of concern can use sensitive personal information to illicit ends, such as curbing dissidents, activists, and journalists abroad; targeting misinformation campaigns at certain population subgroups; and spying or even blackmailing government personnel. 

This new executive order directs the DOJ to issue regulations limiting U.S. companies from transferring or selling bulk data sets to covered persons or entities subject to the jurisdiction of countries of concern—namely, China, Russia, Iran, North Korea, Venezuela, and Cuba. The executive order includes six categories of sensitive personal data to the impending curbs: biometric identifiers, genomic data, personal identifiers, personal health data, personal financial data, and precise geolocation data. For each of these categories, the incoming government program to regulate data transfers will establish certain volume thresholds. Some classes of transactions will face bans altogether, while others will be prohibited unless they comply with additional requirements. Three classes of data transactions fall into the latter: employment, investor, and third-party vendor agreements. 

Several concerns come with the new rules delineated in the ANPRM. For one, it remains unclear how the rules would cover third-country transfers. While the executive order classifies transactions based on their inherent characteristics and the threat of access by countries of concern or covered persons, their enforceability remains unclear. Although several U.S. technology companies transfer personal information across borders, the executive order would likely  affect the business models of data brokers that profit from the bulk collection, aggregation, and sales of a wide spectrum of personal data. Lastly, prior to this action, U.S. firms had few restrictions hindering their data exports. So while the executive order is meant to minimize negative externalities, its effect depends on how the DOJ, along with other federal agencies, decides to implement and enforce its rules. 

Recommendations and Conclusion

Maintaining the U.S. competitive edge in technology requires a whole-of-government approach to incentivizing innovation. Several adjustments may be made to current U.S. policy to ensure that the country’s investments yield the most substantial results. 

• Move quickly to pass legislation on digital privacy and protecting the U.S. competition landscape, which must be considered through a national security lens. Comprehensive legislation in these policy areas has so far failed to become law, ceding leadership to other economic blocs around the world. Failure to act is itself a national security problem.
• Build a national security factor into antitrust analysis.  The DOJ and FTC should embed national security considerations into antitrust enforcement analytical models. In other words, the agencies should consider the effects on U.S. national security when proceeding with an antitrust complaint. Current dominant positions in the administration and Congress equate a tech company’s size with the potential damage to competition and, therefore, the U.S. economy at large. Policymakers should reconsider whether that is the relevant criterion to estimate negative effects on consumers. Large companies that behave responsibly can enable the United States to meet its defense needs and national security priorities. 
• Establish fast-track processes to set up CET-related facilities.  Evaluating environmental impacts of new projects is a paramount consideration for activities related to the tech sector. However, given the urgency of scaling up U.S. capabilities in research and production of CETs, review of projects related to sectors included in the White House CET list should receive its own fast-track process. 
• Continue exploring alternative pathways of multilateralizing economic security measures.  The Biden administration has rapidly expanded the U.S. economic security tool kit through new semiconductor export controls, a novel outbound investment mechanism, and the recent EO on data security. These measures require a multilateral approach to ensure their effectiveness and mitigate the design-out threat that unilateral action poses. Existing multilateral bodies, such as the Wassenaar Arrangement, were not made to confront today’s challenges. Working with allies to find novel pathways of coordinating policy on both the promote and protect sides of the economic security coin, such as working together on CET supply chain diversification efforts or designing common outbound investment screening approaches, continues to be a critical consideration. Multilateralizing economic security measures would ensure the U.S. tech ecosystem is not further isolated by unilateral tools, which ultimately hobble their ability to grow. 
• Pursue a more ambitious trade agenda with economic partners, including a robust digital trade component.  U.S. digital trade engagement has been uneven and has led to a more challenging landscape where U.S. tech champions need to unilaterally abide by foreign e-commerce standards that may curtail their ability to conduct business effectively. Reaffirming a clear U.S. digital trade agenda and embedding it in future negotiations will enable U.S. companies to remain leaders in the sector, ensuring their ability to support national security. 
• Ensure industrial policy measures remain compliant with U.S. multilateral commitments such as WTO rules.  The aspiration to remain a tech leader comes with the responsibility to promote and abide by global norms around economic engagement. Some recent U.S. economic and trade policies have eroded the country’s credibility as well as trust with its partners. The current U.S. policy direction is set to foster a more anarchic international economic landscape that will inevitably hinder homegrown companies’ ability to conduct business abroad. This situation should be rectified. 

Technology has played a central role in protecting the United States and will continue to do so throughout the twenty-first century. Recognizing its significance is key in today’s landscape of global competition, and promoting policies to spur the sector’s growth is a strategic imperative. The Biden administration must address several policy gaps to help the U.S. tech ecosystem better support national security. Resolving current shortcomings through effective approaches to antitrust, digital competition policy and trade, state-led investments, and economic security measures constitutes an important step in that direction. 

Thibault Denamiel is an associate fellow with the Scholl Chair in International Business at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Taylar Rajic is a research associate with the Strategic Technologies Program at CSIS. William A. Reinsch holds the Scholl Chair in International Business at CSIS. James A. Lewis is a senior vice president and director of the Strategic Technologies Program at CSIS. Julia Brock is a program coordinator and research assistant with the Strategic Technologies Program at CSIS. 

The authors would like to thank John Strezewski for his assistance in writing this paper. 

This report is made possible through generous support from the Software and Information Industry Association. 

This report is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2024 by the Center for Strategic and International Studies. All rights reserved.

Thibault Denamiel

Taylar Rajic

William Alan Reinsch

James Andrew Lewis

Julia Brock

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