China bets on tourism to turn travellers into new engine of growth

More than a millennium after poet Han Yu likened Guilin’s rivers to a “blue-green silk ribbon” and its mountains to “jade hairpins,” China is looking to the scenic region for something beyond poetic inspiration: economic growth.

China’s latest five-year plan calls for turning the country into a “tourism powerhouse,” reflecting Beijing’s growing interest in tourism as a way to encourage consumer spending and diversify the economy. The strategy is particularly relevant as weaker economic momentum has made Chinese households more cautious about spending.

Tourism also offers a less politically sensitive source of foreign income. Spending by international visitors is counted as an export, unlike the manufactured goods whose growing volumes have contributed to trade tensions with China’s partners, the Wall Street Journal notes.

For Chinese consumers, travel is increasingly becoming a priority even as spending on goods slows. Guo Jiehui, a 35-year-old teacher from Shenzhen, recently took her nine-year-old son to Guilin. She said she had reduced spending on clothing and other goods but continued to travel several times a year.

“We are willing to invest in travel,” she said.

Morgan Stanley expects tourism and travel revenue, including spending by domestic and foreign visitors and business travellers, to account for 6.7% of China’s GDP by 2030, compared with 4.8% in 2024. That would put the sector’s revenue at about $1.8 trillion, up from roughly $1 trillion last year.

China is also trying to attract more foreign visitors. Nearly 23 million foreigners entered the country during the first half of 2026, a 20% increase from a year earlier, with more than three-quarters entering visa-free, according to China’s immigration agency.

But the strategy faces a fundamental challenge: more tourists do not necessarily mean much more spending.

Domestic travel reached nearly 3.5 billion trips in the first half of 2026, up 5.4% year-on-year. Yet spending increased only 2%, reaching about $478 billion, according to China’s Ministry of Culture and Tourism.

In Guilin’s Yangshuo county, visitors increasingly favour inexpensive activities such as taking photographs at scenic locations for social media. Some are also skipping attractions such as bamboo-raft cruises, according to local raftsman Wu Fandong.

“They travel more, but they spend less money,” said Wu.

Foreign tourists, meanwhile, spend considerably less in China than visitors to the U.S. Trip.com estimates that international visitors to China spent about $2,200 each last year—less than two-thirds of the amount spent by foreign tourists in the U.S.

That gap suggests considerable room for growth. At the luxury Yangshuo Sugar House resort, where rooms start at around $300 a night and meals can cost $300 per person, foreign guests accounted for 37% of visitors through July this year, up from 21% during the same period in 2025.

Foreign visitors also tend to stay longer and engage more deeply with destinations, according to the resort’s general manager, Ken Luo.

For travellers such as German visitor Isabelle Heizmann, visa-free access has been an important factor in opening China to tourism. She visited Beijing, Shanghai, Guilin and Hong Kong on her first trip to the country.

“That’s why I didn’t come earlier,” she said.

The figures suggest China has succeeded in bringing more people onto the road. The harder task may be persuading them to spend more once they arrive. 

By Sabina Mammadli