Rising Number of Chinese Tourists... Will They Become the 'Savior' of the Korean Economy?

Expecting a Surge in Chinese Tourists During the Golden Week Holiday

Last month on the 27th, Myeongdong in Seoul was bustling with foreign tourists. [Image source=Yonhap News]

As the eight-day holiday coinciding with the Mid-Autumn Festival and National Day begins in China, the number of Chinese tourists visiting Korea is expected to increase significantly. Analysts suggest that if the number of Chinese tourists continues to rise during this holiday period, it could also contribute to the recovery of Korea's economy in the second half of the year.

According to the Korea Tourism Organization and related industries on the 30th, the number of Chinese tourists visiting Korea has been steadily increasing this year. In January, there were only about 25,000 visitors, but the number surpassed 100,000 in April, 200,000 in July, and reached 260,000 last month.

The cumulative number of Chinese tourists from January to August this year was 1,031,000, showing a significant difference compared to the same period last year (123,000). The duty-free industry is optimistic about the 'Youke special' as the increase in Chinese tourists continues for the first time in seven years since the Chinese government's ban on Korean tourism in 2016.

China is experiencing a record-breaking travel rush during the Mid-Autumn Festival and National Day holiday (September 29 to October 6), and Korea's tourism is expected to benefit from this spillover effect.

According to China Central Television (CCTV) on the same day, a total of 12,537 trains transported 20,098,000 passengers nationwide the previous day. This is the first time in history that daily train passengers exceeded 20 million. This increase in travel consumption is interpreted as a result of the first long holiday since the COVID-19 prevention controls, which had been maintained for the past three years, ended in January.

Accordingly, the number of Chinese tourists visiting Korea is also expected to increase further. According to the travel platform Trip.com, flight bookings from China to Korea during this Chinese holiday period increased by 708% compared to last year.

The increase in Chinese tourists could have a positive impact on the economic recovery, which has been sluggish in the second half of the year. Earlier, the Bank of Korea forecasted in a report released on the 24th of last month that Chinese tourists would contribute to a 0.06 percentage point increase in Korea's economic growth rate this year.

The Bank of Korea estimated that the number of Chinese arrivals would reach about 2.2 million in the second half of this year and would increase significantly next year compared to this year.

Jeon Jong-gyu, a researcher at Samsung Securities, explained, "As an overseas travel destination for National Day, Korea is expected to hold a top-tier position along with Thailand, which operates a visa exemption program for Chinese tourists."

On the afternoon of the 24th of last month, groups of Chinese tourists entered a duty-free shop in Seoul. [Image source=Yonhap News]

The recent gradual recovery of the Chinese economy is also positive for Korea's economic recovery. On the same day, the National Bureau of Statistics of China announced that China's manufacturing Purchasing Managers' Index (PMI) for September rose by 0.5 points from the previous month to 50.2.

This means that China's manufacturing PMI has surpassed 50 for the first time in six months, indicating that the economy has entered an expansion phase. Until last month, China showed signs of deflation due to falling prices and a sluggish real estate market, so this is a positive change.

However, since the Chinese economy has not yet fully recovered and the relationship between Korea and China remains unstable amid the US-China hegemony conflict, some analysts believe it will be difficult to see the same effects from Chinese tourists as in the past.

Japanese investment bank Nomura diagnosed, "Similar to Japan in the early 2000s and Europe in 2008, China may have entered a balance sheet recession," and added, "Active fiscal policy and structural reforms are necessary."

This content was produced with the assistance of AI translation services.