CORRECTING THE TOURISM TRADE BALANCE

James Jianzhang Liang, Co-founder and Chairman, Ctrip, on bringing more tourists to China

James Jianzhang Liang was at ITB China this year, where he addressed a “standing room only” conference room on innovating in dealing with demographics; but also made some hard-hitting points about China’s tourism trade deficit. We asked him to tell us more.

Much of China’s trade surplus in physical goods is being offset by a deficit in tourism. The trade surplus in goods amounts to US$400bn, but the trade deficit in tourism is around US$200bn. On a global perspective, when one talks about trade, and the contribution of tourism to different nations’ economies, Chinese outbound tourists are major contributors. China has a huge potential to develop inbound business, but there is a continuing trend for outbound tourism to outgrow inbound by a big margin, and this could eventually lead to an overall trade deficit, which would have a very important impact on the economy.

PAYMENT FOR GOODS AND SERVICES IS BECOMING A MAJOR ISSUE FOR FOREIGN VISITORS TO CHINA

What do you suggest should be done to rectify this?

Ctrip cannot fix this problem alone. There are a lot of issues that need to be dealt with. The facilitation of visas is one area where things could be further improved. We can help to some extent when it comes to helping people with their applications and so on. But payment for goods and services is becoming a major issue for foreign visitors to China, as China has gotten rid of cash, and most Chinese people pay with their phones. The issue arises where foreigners cannot link their bank cards to China’s mobile payment systems. While some merchants accept cards like Visa or Mastercard, more and more only take cash or mobile payment. We believe that if operators like ourselves, or WeChat Pay, can be linked to foreign bank cards, this could greatly facilitate travel for overseas visitors.

You’re talking about a deficit, and in your presentation, you showed examples of other countries that had issues in this respect. Where is China situated on that sliding scale?

In terms of absolute trade de cit in tourism, China’s deficit is bigger than all the others combined. In terms of percentage of GDP, China is ranked 11th, behind some of the countries that have internal problems, like Sudan or the Palestinian territories, because not many people want to go there. While there is a problem to be solved, there is also a perception issue. Work needs to be done on promotion, spending more on social media and other advertising means, to promote destinations here.



Photo: James Jianzhang Liang Co-founder & Chairman, Ctrip