&#34;China Travel&#34; is on fire! How much economic contribution potential does it have?
Data from the National Bureau of Statistics shows that thanks to the relaxation of inbound tourism visa policies, during the New Year's Day period in 2025, a total of 185,000 foreigners entered China customs, a year-on-year increase of 33.6%.
At the end of last year, the National Immigration Administration announced that it would fully relax and optimize the transit visa-free policy, further expand the scope of visa-free countries, and optimize entry policies:
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Starting from December 17, 2024, the stay duration for transit visa-free foreigners in China will be extended from the original 72 hours and 144 hours to 240 hours (10 days), while 21 new ports will be added as entry and exit ports for transit visa-free personnel, and the area for stay activities will be further expanded.
From November 30, 2024, to December 31, 2025, a visa-free policy will be trialed for ordinary passport holders from Bulgaria, Romania, Croatia, Montenegro, North Macedonia, Malta, Estonia, Latvia, and Japan.
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Helen Qiao, Izumi Devalier, and others from Bank of America Merrill Lynch stated in a research report released on January 10 that the relaxation of inbound policies has driven the popularity of &#34;China Travel.&#34; Although the recent growth in inbound tourism is unlikely to drive overall growth in the short term, there is still significant growth potential to be released.
Bank of America estimates that if the share of China's tourism exports in GDP can catch up to the levels of South Korea or Japan, it will bring over 200 billion to 350 billion RMB in revenue to China's tourism industry.
<h2>Inbound tourism potential yet to be released, possibly driving an increase in revenue of 200 billion to 350 billion RMB</h2>
The report states that after the relaxation of China's inbound policies, interest in inbound tourism to China has increased, with Google search data showing that the trend for &#34;flights to China&#34; peaked around the New Year holiday.
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At the same time, data from the Shanghai Entry-Exit Administration shows that as of November 2024, the total number of international travelers entering the country was 549,000, which, although still down 18% compared to the same period in 2019, has significantly narrowed from a 27% year-on-year decline in October.
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The report believes that there is still considerable growth space for China's inbound tourism. According to the 2024 Travel and Tourism Development Index released by the World Economic Forum, China's ranking among Asian economies is only behind Japan.
However, the contribution of the tourism industry to China's economy is still lower than that of other major Asian economies. Official data shows that in the first three quarters of 2024, China's total tourism export amounted to 74.5 billion RMB, equivalent to 0.2% of nominal GDP, which is lower than the levels of 0.9% and 1.3% for Japan and South Korea during the same period.
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Therefore, Bank of America expects that if China's tourism exports can match the proportion of GDP seen in South Korea or Japan, it will bring over 200 to 350 billion RMB in revenue to China's tourism industry.
The report also adds that there is still room for improvement in China's tourism industry regarding tourism priorities, services, and infrastructure, and that better promotion of tourist attractions and experiences is expected through government investment or online marketing

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Bank of America expects that if the share of China's tourism exports in GDP can catch up with the levels of South Korea or Japan, it will bring more than 200-350 billion RMB in revenue to China's tourism industry

- China's inbound tourism is experiencing growth due to relaxed visa policies, with 185,000 foreign arrivals during the New Year period, a 33.6% increase year-on-year.  
- Analysts from Bank of America Merrill Lynch project that if China's tourism export share of GDP matches that of South Korea or Japan, it could generate an additional 200 to 350 billion RMB in revenue.  
- Despite the potential, China's tourism contribution to GDP remains low compared to other major Asian economies, indicating significant room for development in the sector.

The potential of "China Travel": an annual incremental increase of 200 to 350 billion RMB