Economics of Chinese Tourists

A new report shows that the consumption of Chinese tourists contributed to creating 194,000 new jobs in South Korea last year.

According to a report entitled “Economics of Chinese Tourists” by the LG Economic Research Institute (LGERI) on August 10, a total of 5,984,170 Chinese nationals visited South Korea in 2015, nearly triple from 2.22 million in 2011. The figure also accounted for 46.2 percent of the total of 12,961,458 foreign tourists.

Nearly six million Chinese tourists spent a total of 15.7 trillion won (US$14.35 billion) in South Korea, up by 3.4 times from 4.6 trillion won (US$4.2 billion) in 2011. The figure took up 62.5 percent of the total foreign tourists spending and 2.1 percent of the total household consumption of South Korea.

The report suggested that Chinese tourists induced nominal production worth 27.66 trillion won (US$25.28 billion) and created an added value of 12.51 trillion won (US$11.43 billion) last year. Moreover, they created 194,000 new jobs in South Korea. 

It was found that Chinese tourists visiting South Korea spent 67 percent of their total traveling expenses on shopping. Accordingly, their expenses were higher than other foreign tourists. A Chinese traveler visiting South Korea last year spent US$2,319 (2.54 million won) on average, which is 1.4 times higher than the average of foreign tourists.

If the current trend continues, the number of Chinese visitors is expected to surpass 15 million in 2020 and the combined spending will account for 6.5 percent of South Korea's total household spending as of 2015, the report noted. However, its short-term variability will be larger than other foreign visitors as Chinese travelers are highly likely to be sensitive to political and diplomatic issues. The strong won could be another factor to reduce the number of Chinese visitors.

Shen Jia, a senior researcher at the LGERI, said, “According to a survey of high-income young Chinese travelers conducted in China, 37 percent of the respondents said they would like to visit Australia the most, following France with 27 percent and the U.S. with 22 percent. South Korea ranked sixth in the survey. The country should push ahead with qualitative attraction rather than quantitative attraction, and overcome the volatility through the strong value.”