Why do the birds keep on singing? Consequences of the US elections for China’s outbound tourism

Growing up in West-Berlin, one concern of your humble editor was always that the USA and the USSR could make a deal swapping Cuba for West-Berlin. It seems that such backroom discussions actually took place, albeit without result.

For Taiwan, having a deal-maker without limitations for action from the Supreme Court or from Senate and House taking over the USA, similar nightmares are likely to appear. For tourism relations between the island and the mainland the current ice-age with less than 40,000 Mainland Chinese arrivals in Taiwan per month is likely to continue.

Globally, the need to change business models in tourism due to the consequences of climate change, global warming and loss of biodiversity will get even more imminent, as the incoming government already made it clear that environmental regulations will be scrapped and that the second-biggest polluter in the world will go back to denying the need for decisive action. As the old Nancy Sinatra song asked: Why do the bird go on singing? Don’t they know it’s the end of the world?

The USA received in the first three quarters of 2024 almost 1.3 million visitors from Mainland China, representing 55% of the 2019 level, based in big parts to family visits, educational and business trips rather than leisure tourism. With hawkish anti-Chinese politicians being appointed to relevant positions including the Secretary of State and a likely heating up of the trade war between the two countries, no further increase in arrivals is to be expected.

For Europe, the pressure to increase spending on defence at a time of slow economic growth and the need to invest in digitalisation and mitigation of climate change will prolong the recovery phase from the pandemic, resulting in a decrease in business travels from China to Europe. On the other hand, the decoupling from China will have to be reviewed in the light of new American tariffs on the horizon.

The Global South countries are likely to strengthen their relations with China, which will strive to take over the role as the only reliable partner and increased tourism is a likely consequence. African and South American destinations can expect an uptick of interest from Chinese travellers looking for new places to visit.

The Middle East is also likely to be among the winners in the restructuring process of China’s outbound tourism. Countries like Egypt, Qatar and UAE are already seeing substantial increases in arrival numbers from China, a trend which the new geo-political situation should further support.

The main winner however should be the neighbouring countries of China, from Nepal to Japan. The alliances between Japan, South Korea, Australia and the USA will see a price tag added to them and China's neighbours will have to rethink the level of distance they can still afford to have to the Chinese government accordingly. The continuing anxiety in China about the future economic development of the country furthermore supports the tendency of travelling rather within the region, spending less money and time per trip on transportation.

If Frank Sinatra is not to your liking, how about this Fun Boy Three comment: https://www.youtube.com/watch?v=on-y9Pv-CJA

As always, best regards from Prof. Dr. Arlt and the whole COTRI INTELLIGENCE team! ?