BOFIT Viikkokatsaus / BOFIT Weekly 2017/40

Chinese made 2.5 billion domestic vacation journeys and 60 million holiday trips abroad in the first half of the year. Domestic holiday travel grew by 13 % y-o-y. After years of soaring growth, foreign holiday travel grew by just 5 %, because, even as traveller numbers soar, it is natural that growth in percentage terms slows. Moreover, lower wage growth favours cheaper in-country holidays, but there are also other factors such as fear of terrorism, which have reduced the growth in foreign travel.

The economic impacts of Chinese foreign travel are substantial. Chinese tourists have been the biggest holiday spenders abroad since 2012 compared to tourist groups of other nationalities. The World Tourism Organization reports that Chinese tourists spent 260 billion dollars abroad in 2016, well ahead of the second-place Americans, who spend 120 billion dollars on their travels abroad. A big influence on Chinese spending patterns is that 60 % of foreign travellers fall into the 18–34 age group, and China's younger generations carry fewer stigmas about consuming than their elders. China's tourism spending abroad accounts for nearly 60 % of the annual current account's spending on services. This spending has significantly reduced the country's current account surplus.

This week Chinese spend their annual Golden Week holidays. Some 710 million Chinese (up 10 % from last year) are expected to take holiday trips somewhere inside China. Another 6 million will journey abroad. The record number of travellers has huge economic impacts. Domestic spending on tourism this week is expected to reach 89 billion dollars.

The growth of Chinese visitors to Finland has been staggering. Statistics Finland reports that overnight stays of Chinese tourists in Finnish inns and hotels reached nearly 180,000 in the first seven months of this year, a 46 % increase from the same period in 2016.