Tourism in China

Alan A. Lew, PhD

Northern Arizona University

Lawrence Yu, PhD

The George Washington University

John Ap, PhD

The Hong Kong Polytechnic University

Zhang Guangrui
The Chinese Academy of Social Sciences

Editors

The Haworth Hospitality Press

An Imprint of The Haworth Press, Inc.
New York London Oxford

Published by
The Haworth Hospitality Press, an imprint of The Haworth Press, Inc., 10 Alice Street, Binghamton,
NY 13904-1580.
2003 by The Haworth Press, Inc. All rights reserved. No part of this work may be reproduced or
utilized in any form or by any means, electronic or mechanical, including photocopying, microfilm,
and recording, or by any information storage and retrieval system, without permission in writing
from the publisher. Printed in the United States of America.
TR: 5.21.03
Cover design by Lora Wiggins.
Library of Congress Cataloging-in-Publication Data
Tourism in China / Alan A. Lew ... [et al.].
p. cm.
Includes bibliographical references (p. ) and index.
ISBN 0-7890-1281-2 (hard : alk. paper) ISBN 0-7890-1282-0 (soft)
1. TourismChina. I. Lew, Alan A.
G155.C55 T68 2002
338.4'79151046dc21
2002068768

CONTENTS
About the Editors
Contributors

xi
xiii

Foreword

xvii
Harsh Varma

SECTION I: INTRODUCTION AND HISTORICAL

DEVELOPMENT
Chapter 1. Introduction: Chinas Tourism Boom
Zhang Guangrui
Alan A. Lew
Chinas Tourism Environment
International Tourism Environment
The Chapters
Chapter 2. Chinas Tourism Since 1978:
Policies, Experiences, and Lessons Learned
Zhang Guangrui
Tourist Movement
Tourism Infrastructure
The Context of Chinas Tourism Policies
Experiences and Lessons
Conclusion
Chapter 3. China in the Eyes of Western Travelers,
1860-1900
Xiaolun Wang
Background
Routes and Modes of Travel
Travelers and Travel Narratives
Implications

3
5
9
13
14
20
23
29
33
35
36
37
40
48

Chapter 4. Chinese Vernacular Heritage As a Tourist

Attraction: The Case of Beijing
Ning Wang

51

Introduction
Vernacular Architecture As a Sign of Identity
Quadrangles and the Cultural Identity of Beijing
Urban Modernization versus Vernacular Quadrangles
Turning the Quadrangle into a Tourist Attraction
Conclusion

51
52
55
58
60
62

SECTION II: RESEARCH AND IMPACTS

Chapter 5. Tourism Research in China
Zhang Guangrui
Tourism Research Institutions
Outline of Tourism Research Development
Dissemination of Research Findings
Trends and Problems
Recommendations
Conclusion
Chapter 6. Economic Impact of Tourism in China
Xu Gang
Claudia Kruse
Tourisms Export Contributions to the Chinese Economy
The Economic Contributions of Chinese Domestic Tourism
Tourism, Jobs, and GDP
Tourism and Chinese Regional Development
Tourism and Poverty Alleviation
Look to the Future: Challenges and Policy Options
Chapter 7. Ecotourism in Chinas Nature Reserves
Kreg Lindberg
Clem Tisdell
Dayuan Xue

67
68
71
74
76
79
81
83

84
88
90
90
95
98
103

Nature Reserves and Ecotourism: Context and Policy Issues 105

The Role of Ecotourism in Reserve Finance
107
The Role of Ecotourism and Local Development
111

Infrastructure and Environmental Management

Staffing Issues
The Visitor Experience and Interpretation
The Example of Jiuzhaigou Biosphere Reserve,
Sichuan Province
Summary

114
117
118
121
122

SECTION III: INDUSTRY AND DEVELOPMENT

Chapter 8. Critical Issues in Chinas Hotel Industry
Lawrence Yu

129

Chinas Hotel Industry

Consolidation and Brand Development
Development Strategy by Global Hotel Companies
Analysis of Hotel Financial Performance
Conclusion

130
132
136
137
139

Chapter 9. Travel Agencies in China at the Turn

of the Millennium
Qian Wei
Overview of the Development of Chinas Travel Agencies
Chinas Travel Agencies Today
Major Problems Faced by Chinas Travel Agencies Today
Conclusion and Recommendations
Chapter 10. Chinas Tourist Transportation:
Air, Land, and Water
Barry Mak
Air Transportation
International Tourist Land and Water Transportation
Domestic Tourist Surface Transportation
Transportation Issues in Chinas Future
Chapter 11. An Assessment of Theme Park Development
in China
John Ap
Theme Park Development
Elements of Success

143
145
147
154
159
165
167
173
176
183
195
196
200

Reasons for Failure

Prospects Facing the Theme Park Industry
in the Twenty-First Century

202
209

SECTION IV: TOURISM MARKETS

Chapter 12. Tourism Marketing in the Peoples Republic
of China
Suosheng Wang
John Ap
Current Market Situation
Tourism Marketing at the National Level
Tourism Marketing and Promotion
Issues Affecting the Development of Chinas
Tourist Markets
Summary
Chapter 13. Short- and Long-Haul International Tourists
to China
Xiaoping Shen
Foreign Visitors in China
Growth of Long-Haul Foreign Visitors
Characteristics of Long-Haul Visitors
Spatial Concentration and Changes
Conclusion
Chapter 14. Leisure in China
Honggen Xiao
Characteristics of Leisure in China
Leisure Products in China
Conclusion: Toward the Emergence of a Leisure Industry
Chapter 15. Mainland Chinese Outbound Travel
to Hong Kong and Its Implications
Zhang Qiu Hanqin
Carson L. Jenkins
Hailin Qu
Chinas Outbound Travel
Destination Hong Kong

217

218
220
224
229
233
237
238
241
244
251
259
263
264
266
273
277

278
280

Mainland Tourists
Policy Implications for Hong Kong
Conclusion

286
290
292

SECTION V: CONCLUSION
Chapter 16. World Trade and Chinas Tourism:
Opportunities, Challenges, and Strategies
Lawrence Yu
John Ap
Zhang Guangrui
Alan A. Lew
Opportunities
Challenges
Strategies
Conclusion

297

297
299
304
306

Appendix: Acronyms and Glossary

309

Index

315

Chapter 1
Introduction:
Introduction:
Chinas Tourism Boom

Chinas Tourism Boom

Zhang Guangrui
Alan A. Lew

Travel and tourism has become a strategic industry in Chinas development toward a socialist market economy. Two decades of development have yielded both positive experiences and hard lessons. The
country is still probing better ways of developing a strong travel and
tourism industry that can compete successfully in regional and global
markets. China faces many opportunities and challenges in developing its tourism in this new century, although they may be quite different from those in the decade before. Chinas tourism has a bright future,
although arduous efforts will be required to develop it effectively.
The compilation of chapters in this book presents the diverse opportunities and challenges that China faces, as well as some of the strategies that help to bring about more successful future development.

CHINAS TOURISM ENVIRONMENT

China is rich in tourism resources. An incredible diversity of landscapes and cultures stretches across the vastness of the country. Every
type of tourist will find something: densely crowded cities with modern skylines and old traditional structures, UNESCO-recognized natural and cultural heritage sites, agricultural villages nestled in lush
tropical vegetation, nomadic horse riders galloping across open grasslands and deserts, snow- and ice-covered mountains offering challenging adventures for new tourists, and quality resorts with world3

TOURISM IN CHINA

class golf and other entertainment activities. Most of the many cultures are old and very traditional. There is great potential in China for
specialized tourism, focusing on ethnic groups and colorful cultures,
as well as environmental adventure. The growing market in ecotourism in the developed world will find considerable opportunities
in China, as well.
Sound economic growth supports the tourism industry. Further
deepening of the recent economic reforms and increasing openness to
the outside world have helped Chinas economy grow quickly. The
countrys gross domestic product (GDP) was RMB 8940.4 billion
(bn) yuan in 2000 (US$1.00 = RMB 8.30 yuan), and China experienced an annual growth of 8.3 percent in the latter half of the 1990s
(Zhu 2001). It is expected to grow at 7 percent per year in the first five
years of the new century. The stronger economy will afford further
improvement in infrastructure for tourism development and, at the
same time, will foster more Chinese tourists, both domestic and outbound.
Positive government policies advance tourism. The Chinese government first made clear that tourism was an important part of the tertiary (service) industry in the 1980s. Tourism was further designated
as a growth point of the national economy in the late 1990s. So far,
over two-thirds of the provincial governments have committed to
making tourism one of their pillar industries. In the national campaign for the development of western China, tourism has also been
made a priority among industrial sectors. In his report on the 10th
Five-Year Plan for the National Economy and Social Development,
Premier Zhu Rongji stressed that the development of the service sector should be sped up, and more efforts should be given to the service
industries directly related to resident consumption such as real estate,
community service, travel and tourism, catering, entertainment and
recreation, and health (Zhu 2001). Therefore, more preferential government policies have been, or will be, worked out to support tourism
development at both central and local levels. For example, the central
government has increased public holidays, and purposely made three
weeklong holidays per year (one each during the Spring Festival,
May Day Festival, and the National Day holiday, which starts October 1) to give residents more leisure time. Indeed, this practice has
proved that domestic tourism can be a driving force for increasing domestic consumption, and further stimulating production.

Introduction: Chinas Tourism Boom

INTERNATIONAL TOURISM ENVIRONMENT

Chinas entry into the World Trade Organization will expand tourism. China joined the World Trade Organization in November 2001.
This may provide other opportunities for its tourism development, including:

fewer formalities and barriers for cross-border travelers,

reductions in traveling costs as a result of global competition,
removal of some protectionist policies, and
upgrade of communication, financial, and information facilities.

China will remain more open to the outside world, and more international management practices will be introduced. The removal of
barriers to trade and travel will enhance Chinas position as a country
for financial investment, international business, and business and leisure travel.
The international climate is improving for Chinas tourism development. China is located in the rapidly growing Asia Pacific realm.
Both economies and tourist travel are expected to grow faster in this
region than in the rest of the world, although the unexpected financial
crisis cast some shadows on the regions economy in the late 1990s.
According to the WTO, the worldwide average growth of international tourism during the 1990s was less than 5 percent, while growth
in the Asia Pacific region was over 8.3 percent in the first half of the
decade, and 2.7 percent in the latter half due to the financial crisis
(WTO 2000).
China is the largest country in the Asia Pacific region and an active
member of the Pacific Asia Travel Association (PATA). In terms of international tourism, China enjoyed the fastest growth in arrivals in the
region in the last decade, and such trends will develop in the years to
come. In addition to Japan, which is expected to continue to be a major
tourist market for China, other countries in the region, and the close
neighboring countries in particular, are expected to bring even more
leisure tourists and business travelers to China. According to the WTO,
Chinas top ten markets will include Japan, the Republic of Korea,
United States, the Russian Federation, Mongolia, Singapore, Malaysia, the Philippines, the United Kingdom, and Germany by 2020, and
Chinas annual growth rate from 2000 to 2010 will be 9.5 percent
(WTO 2000). The return of Hong Kong and Macao to their motherland

TOURISM IN CHINA

has been a success, making movements of people easier and more frequent. As a unique and interesting destination, China will be a major
factor in the future development of regional tourism throughout Asia,
as well as throughout the world. According to the forecast by WTO,
China will be the top international destination country in the world
with about 137 million international arrivals by the year 2020, and with
over 1 million outbound visitors a year, China will rank fourth on the
list of countries generating tourism (Tables 1.1 to 1.4).
The success of Chinas market-oriented reforms has drawn attention worldwide, from politicians to business circles and the general
public. Chinas rapidly developing business environment is already
responsible for a major part of the growth in tourism in recent years.
Not only are foreign investments flowing into the country, but they
also are increasing the numbers of entrepreneurs, who typically combine pleasure with their business trips. This component of the visitor
market will likely increase in the coming years. There is little doubt
that, barring any unpredictable upheavals, China will soon be as successful in the tourism business as any competitor in the international
marketplace. Based on the WTOs bright forecasts, and adjusted for
the specific goals and conditions, the China National Tourism AdTABLE 1.1. Worlds Top Ten International Tourism Destinations (2000)

Rank

Country

Intl Tourist Arrivals

(millions)

Growth (%)

74.5

2.0

France

United States

52.7

8.7

Spain

48.5

3.7

Italy

41.2

12.8

China

31.2

15.5

United Kingdom

24.9

15.5

Russian Fed.

22.8

23.2

Canada

20.4

4.9

Mexico

20.0

5.0

Germany

18.9

10.5

10

Source: World Tourism Organization (WTO) (2001). Tourism Highlights 2001.

Madrid: WTO.

Introduction: Chinas Tourism Boom

TABLE 1.2. Worlds Top Ten International Tourism Earners (1999)

Rank

Country

Intl Tourism Receipt

(US$ million)

Annual Growth
(%)

United States

74, 881

5.0

Spain

32, 497

8.9

France

31, 507

5.3

Italy

28, 359

5.0

United Kingdom

20, 223

3.6

Germany

16, 730

0.2

China

14, 098

11.9

Austria

12, 533

0.8

Canada

10, 171

8.2

10

Mexico

7, 223

3.6

Source: World Tourism Organization (WTO) (2001). Tourism Highlights 2001.

Madrid: WTO.
TABLE 1.3. Top Ten World Tourism Destinations in 2020

Rank
1
2
3
4
5
6
7
8
9
10
TOTAL

Country/Region
China
United States
France
Spain
Hong Kong, SAR,
China
Italy
United Kingdom
Mexico
Commonwealth
of Independent
States
Czech Republic

Intl Tourist
Arrivals
(thousands)

Market
Share (%)

1995-2020
Growth (%)

137,100
102,400
93,300
71,000
59,300

8.6
6.4
5.8
4.4
3.7

8.0
3.5
1.8
2.4
7.3

52,900

3.3

2.2

52,800
48,900
47,100

3.3
3.1
2.9

3.0
3.6
6.7

44,000
708,800

2.7
44.2

4.0

Source: World Tourism Organization (WTO) (1997). Tourism: 2020 Vision.

Madrid: WTO.

TOURISM IN CHINA
TABLE 1.4. Top Ten World Tourist-Generating Countries in 2020

Rank
1
2
3
4
5
6
7
8
9
10
TOTAL

Country/Region
Germany
Japan
United States
China
United Kingdom
France
Holland
Canada
Commonwealth
of Independent States
Italy

Outbound Tourist
Departures (thousands)

Market Share
(%)

163,500
141,500
123,300
100,000
96,100
37,600
35,400
31,300
30,500

10.2
8.8
7.7
6.2
6.0
2.3
2.2
2.0
1.9

29,700
788,900

1.9
49.2

Source: World Tourism Organization (WTO) (1997). Tourism: 2020 Vision.

Madrid: WTO.

ministration (CNTA) developed the 10th Five-Year Plan and LongTerm Goal Outlines up to 2015 and 2020 for Tourism Development
in China (CNTA 2001). Over the next twenty years, according to
this ambitious plan, China will move from being a big tourism country to becoming a powerful tourism country. Specific quantitative
goals set in the plan include the following:
By 2020, China will have 210 to 300 million inbound tourist ar-

rivals, 2.5 to 3.6 times greater than the figure of 2000. Among
them, foreign tourist arrivals will reach 31 to 45 million, 3 to
4.4 times greater than that of 2000.
International tourism earnings will be US$58 to 82 billion, 3.6
to 5 times above the figure of 2000.
During the same period, domestic tourism revenue will reach
RMB 2100 billion yuan, 6.6 to 9.4 times that in 2000.
Therefore, the total output of both inbound and domestic tourism will be RMB 3600 billion yuan, 8 times of that of 2000,
equivalent to 11 percent of Chinas GDP by 2020. Indeed, the
tourism industry will become the pillar of the countrys economy.

Introduction: Chinas Tourism Boom

For the first five years in the new century, the foundation stage, international tourism revenue will grow by 8 to 10 percent annually,
while domestic tourism revenue will grow by 8 to 9 percent. The second five years will be an upgrading stage, with international tourism
revenue growing by 6 to 8 percent, and domestic tourism revenue
growing by 10 to 12 percent. The third five years, from 2011 to 2015,
will be a stage of consolidation. International tourism revenue will
reach US$43 to 56 bn with an annual growth of 6 to 8 percent, while
domestic tourism revenue will grow by 10 to 12 percent. The last five
years of the plan, from 2016 to 2020, will be the stage of perfection.
By 2020, the total tourism output will be RMB 2500 to 3600 bn yuan,
accounting for 7.9 to 11.4 percent of Chinas GDP. The plan has been
approved, and detailed implementation measures have been developed
by the CNTA.
THE CHAPTERS
The contributions in this book describe many of the forms and
challenges of tourism throughout the modern history of China. In
Chapter 2, Zhang Guangrui provides an overview of the key period of
modern tourism development in China, which essentially began in
1978. Comparisons to the earlier Maoist Communist period show the
remarkable changes that were unleashed in that year. In Chapter 3
Xiaolun Wang then takes us back in time more than a century to examine how international tourists from the West viewed China at that
time. Interesting corollaries with modern tourists show how some aspects of the human travel experience transcend time and space. The
introductory section of this book concludes with Ning Wangs (Chapter 4) look at the modern vernacular landscape in Chinaa landscape
that seems to be rapidly disappearing in the modernizing city of
Beijing while it also becomes a tourist attraction. The tension between modernization and traditional values and places are evident
throughout this introductory section.
Section II addresses some of the more empirical impacts of tourism in China. In Chapter 5, Zhang Guangrui provides another insightful overview with a look at the state of tourism research in China and
the variety of agencies and levels at which this takes place. Xu Gang
and Claudia Kruse focus in Chapter 6 on the economics of tourism

10

TOURISM IN CHINA

that have been so important in driving this growing sector in China.

In Chapter 7, Kreg Lindberg, Clem Tisdell, and Dayuan Xue provide
insight into ecotourism in China and its sometimes problematic role
in the management of Chinas nature reserves.
The chapters in the third section of the book assess major segments
of Chinas tourism industry. Lawrence Yu (Chapter 8) describes the
development and challenges of Chinas accommodations industry,
which has struggled over the years to meet the needs of growing tourist demand. Even more of a challenge has been the complex development of travel agencies in China, which Qian Wei so well describes in
Chaper 9. In Chapter 10, Barry Mak gives a comprehensive overview
and analysis of the development of the varied forms of transportation
that tourists and other long-distance travelers use in China. Each form
has had its own distinct development history through Chinas transition from communist to market orientations. John Ap (Chapter 11)
provides several case studies in his description of the occasional successes, but more common failures, in rapid growth of theme and
amusement park development in China. He provides a detailed and
useful description of how China, and its investors, might improve the
success of future man-made attractions.
The chapters in Section IV explore the tourists themselves, both
international and domestic. The tremendous growth in Chinas tourism has actually occurred with limited organized marketing on the
part of the Chinese, as Suosheng Wang and John Ap describe in
Chapter 12. They explain how China has tried to manipulate the tourism market, in a rather basic manner so far. In Chapter 13, Xiaoping
Shen describes the number and characteristics of international tourists to China. She notes the distinct market segments that exist, especially the difference between short-haul (mostly from Asian countries) and long-haul visitors. In Chapter 14, Honggen Xiao looks at
leisure in China, providing insight into the lifestyle of contemporary
Chinese, for whom domestic and outbound travel have now become
major life goals. Outbound travel is described in Zhang Qiu Hanqin,
Carson L. Jenkins, and Hailin Qus contribution (Chapter 15), with a
focus on Hong Kongs role in the development of this potentially
huge market for Asia and the world.
The editors of this book combine their collective expertise with the
insights that the contributing authors provided to lay out the challenges that Chinas tourism faces and the future development strate-

Introduction: Chinas Tourism Boom

11

gies that could enhance its success in Chapter 16. No one can predict
the future, but much can be learned from the past. That being said,
tourism is a huge phenomenon in China, and not all of its facets are
covered in this book. This book was intended to be a second edition
to Tourism in China (Lew and Yu 1995.) However, reflecting the
many changes that Chinas tourism has undergone since the earlier
book was published, this volume contains mostly new chapters and
has a distinctly different focus. One major difference is that this new
effort focuses primarily on the core region of Chinas tourism development, which is situated in the Han Chinese area of eastern China.
Due to space limitations, the non-Han Chinese regions of Chinas
southwest, north, and west were intentionally omitted, even though
they have very important roles to play in Chinas overall tourism
economy. With the exception of Chinese outbound travelers to Hong
Kong, the compatriot Chinese regions of Hong Kong, Macao, and
Taiwan were also intentionally omitted, as was border tourism along
Chinas enormous international land boundary. These are all key areas
in the future development of tourism in China and Asia, but their inclusion would have easily doubled the length of the current book
although it may justify a future sister volume. Despite these limitations, we hope you find the book useful in your efforts to understand
Chinas tourism.
REFERENCES
CNTA (2001). zhongguo lvyouye fazhan shiwu jihua he 2015/2020 nian yuanjing mubiao gangyao (The 10th five-year plan and the long-term goal outlines up
to 2015 and 2020 for tourism development in China). Beijing: China Tourism
Publishing House.
Lew, Alan A. and Yu, Lawrence, eds. (1995). Tourism in China: Geographical, Political, and Economic Perspectives. Boulder, CO: Westview Press.
World Tourism Organization (WTO) (1997). Tourism: 2020 Vision. Madrid: WTO.
World Tourism Organization (WTO) (2000). Tourism 2020 Vision East Asia and
Pacific. Madrid, Spain.
World Tourism Organization (WTO) (2001). Tourism Highlights 2001. Madrid:
WTO.
Zhu Rongji (2001). Report on the 10th five-year plan for the national economy and
social development on March 5, 2001. Peoples Daily (Beijing), March 17.

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