Impact of slowdown of outbound tourism from the People's Republic of China on Asia and the Pacific

Na ayanan, Bad i; Domingo, Ma. Ve onica; Basu Das, Sanchi a
Wo king Pape
Impac o slowdown o ou bound ou ism om he
People's Republic o China on Asia and he Paci ic
ADB Economics Wo king Pape Se ies, No. 782
P o ided in Coope a ion wi h:
Asian De elopmen Bank (ADB), Manila
Sugges ed Ci a ion: Na ayanan, Bad i; Domingo, Ma. Ve onica; Basu Das, Sanchi a (2025) : Impac
o slowdown o ou bound ou ism om he People's Republic o China on Asia and he Paci ic, ADB
Economics Wo king Pape Se ies, No. 782, Asian De elopmen Bank (ADB), Manila,
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IMPACT OF SLOWDOWN OF
OUTBOUND TOURISM FROM
THE PEOPLE’S REPUBLIC OF CHINA
ON ASIA AND THE PACIFIC
Bad i Na ayanan Gopalak ishnan, Ma. Ve onica Domingo, and Sanchi a Basu Das
ADB ECONOMICS
WORKING PAPER SERIES
NO. 782
May 2025
Impac o Slowdown o Ou bound Tou ism om he People’s Republic o China
on Asia and he Paci ic
This pape aims o analyze he impac o ou bound ou ism om he People’s Republic o China
on Asia and he Paci ic. Th ee simula ions ha e been conduc ed o examine di e en si ua ions:
1) business-as-usual om 2017 o 2018; 2) slowdown p io o and a he s a o COVID-19 pandemic,
om 2019 o 2020; and 3) cau ious ou ism eco e y om 2021 o 2022. The indings show ha g oss
domes ic p oduc and expo losses a e no able when ou bound a el declined. The s udy sugges s ha he
economies in he egion conside di e si ying hei ma ke s h ough a el acili a ion and be e connec i i y.
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The ADB Economics Wo king Pape Se ies
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e lec he iews and policies o ADB o
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ADB Economics Wo king Pape Se ies
Impac o Slowdown o Ou bound Tou ism om
he People’s Republic o China on Asia and he Paci ic
Bad i Na ayanan Gopalak ishnan,
Ma. Ve onica Domingo, and Sanchi a Basu Das
No. 782 | May 2025
Bad i Na ayanan Gopalak ishnan ([email p o ec ed])
is he ounde o In ini e Sum Modelling LLC.
Ma. Ve onica Domingo (m domingo.consul an @adb.o g)
is a consul an a he Asian De elopmen Bank (ADB).
Sanchi a Basu Das ([email protected] g) is an economis
a he Economic Resea ch and De elopmen Impac
Depa men , ADB.
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ISSN 2313-6537 (p in ), 2313-6545 (PDF)
Publica ion S ock No. WPS250187-2
DOI: h p://dx.doi.o g/10.22617/WPS250187-2
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ABSTRACT
The s udy analyzes he impac o changes in ou bound ou ism om he People’s Republic o
China (PRC) on he sub egions o Asia and he Paci ic—Sou heas Asia, Eas Asia, Sou h Asia,
Cen al and Wes Asia, and he Paci ic. I conduc s h ee simula ions o unde s and he b oade
economic and sec o al impac s o : 1) he expansion o ou bound ou ism om he PRC om 2017
o 2018; 2) i s slump in 2020 due o he COVID-19 pandemic; and 3) i s cau ious eco e y om
2021 o 2022. The s udy b oadly inds ha g oss domes ic p oduc (GDP) and expo gains o
Asia and he Paci ic sub egions a e no able when he numbe o ou bound ou is s is high, i.e.,
p io o he pandemic and la e in 2021–2022, and again when he PRC slowly opened i s bo de s.
Con e sely, GDP and expo losses a e no able when ou bound ou ism ell in 2020 due o
pandemic. Sec o al impac s a e he e ogenous, and he impac on expo s is no necessa ily
aligned wi h ha on GDP, because he e a e ade di e sions and sec o al esou ce di e sions
ha mu e he impac going om expo s o GDP. Gi en hese dependencies on he PRC’s
ou bound ou ism, he s udy sugges s ha economies in Asia and he Paci ic conside di e si ying
hei sou ce ma ke s h ough a el acili a ion and be e connec i i y.
Keywo ds: ou bound ou ism, expo s, GDP, sec o s, GTAP, Asia and he Paci ic,
People’s Republic o China
JEL codes: C68, F14, Z3
_______________________
We hank Ka hikeyan Chand amohan a esea che in In ini e sum Modelling o his inpu s du ing he p epa a ion o
he pape . We hank Jong Woo Kang, Di ec o ERCI, o his eedback on an ea lie e sion o he pape , and Aleli
Rosa io, senio economics o ice in ERDI, o edi o ial help and inpu s. An ea lie d a o he pape was p esen ed in
ERDI webina , and we hank all who a ended and sha ed hei hough s o help us imp o e he pape .

1.0 In oduc ion
The co ona i us disease (COVID-19) pandemic le an indelible ma k on global ou ism, causing
a d ama ic decline in he numbe o in e na ional a i als and ou ism eceip s. This down u n
e e be a ed ac oss sec o s linked o ou ism, such as hospi ali y and anspo a ion se ices,
ex ile and handic a businesses, and employmen gene a ed by hese indus ies. As he wo ld
na iga es he pos -pandemic eco e y phase, he ou ism isi o numbe s a e g adually icking
up. Howe e , he cau ious app oach adop ed by he People’s Republic o China (PRC) owa ds
in e na ional a el pushes o he economies o conside al e na i e app oaches o ou ism
esilience.
The low o ou is s om he PRC, a majo sou ce ma ke o many des ina ions in Asia and he
Paci ic, came o a sudden hal as he COVID-19 pandemic closed in e na ional bo de s and
discou aged a el in he egion. Economic epe cussions globally we e p onounced, and Asia
and he Paci ic bo e he b un .1 A i als om he PRC o Asia ose om 54.5 million o 70 million
du ing 2015–2019, hen d opped 89.6% in 2020. Among he sub egions, he deepes decline in
a i als om he PRC was in Eas Asia, wi h 92% d op in a i als in ha yea . And because o
ou ism’s in e linkages wi h o he sec o s he slowdown igge ed ippled in o o e all economic
de elopmen and g ow h.
This s udy empi ically examines he impac o he slowdown on ou bound ou is s om he PRC
on he sub egions o Asia and he Paci ic. By del ing in o he his o ical con ex and ecen ends
o he PRC’s ou bound ou ism, his esea ch seeks unde s anding o he economic implica ions
and o iden i y po en ial s a egies o mi iga ion in he u u e.
Sec ion 2 discusses ends in he PRC’s ou bound ou ism globally and wi hin Asia and he Paci ic.
Sec ion 3 e iews exis ing li e a u e, ocusing on he oppo uni ies and challenges associa ed wi h
ou bound ou ism. Sec ion 4 elabo a es on he concep ual amewo k o he g a i y model and
ou lines he me hodology used o empi ical exe cise. Sec ion 5 discusses esul s and sec ion 6
concludes wi h policy ecommenda ions.
2.0 T ends o he PRC’s Ou bound Tou ism: Global and Asia and he Paci ic
This sec ion discusses ou bound a el om he PRC and i s signi icance in ou ism sec o s in
Asia and he Paci ic. In 2015, 91.1 million ou is a i als om he PRC we e epo ed a
des ina ions ou side o he economy, mo e han double he olume o 2010.2 F om 2015 o 2019,
a i als om he PRC inc eased 8.4% annually, as e han he global a e age g ow h o 4.9%.
By 2019, a i als om he PRC peaked a 120 million, equi alen o 8.2% o he o al 1.46 billion
global a i als. Bu he COVID-19 pandemic led o an 87.7% d op in a i als om he PRC
wo ldwide, wi h Asia mos hea ily a ec ed, a e hos ing 58.5% o e seas ou is s om he PRC
in 2019 (Figu e 1).
1 Asia and he Paci ic consis s o he 50 egional membe economies o he Asian De elopmen Bank (ADB).
2 The agg ega e o in e na ional a i als om he PRC epo ed by des ina ions is no equal o o al depa u es om
he PRC.
2
Figu e 1: In e na ional A i als om he People’s Republic o China
o he Wo ld by Region
Sou ce: ADB calcula ions using da a om UN Tou ism. China: Coun y-Speci ic: Ou bound Tou ism 1995–2022
(12.2023): Tou ism S a is ics Volume 1 (accessed 12 Decembe 2024).
Mos o he ou is s om he PRC we e concen a ed in Eas Asia and Sou heas Asia. Among he
des ina ions, Hong Kong, China welcomed he la ges olume in 2019, accoun ing o 13.5% o
o al a i als om he PRC. Japan, he Republic o Ko ea, Thailand, and Vie Nam also ecei ed
a high in lux o ou is s om he PRC. In 2020, a i als om he PRC o hese des ina ions plunged
80% (Figu e 2).
Figu e 2: In e na ional A i als om he People’s Republic o China by Top Des ina ion
PRC = People’s Republic o China.
Sou ce: ADB calcula ions using da a om UN Tou ism. China: Coun y-Speci ic: Ou bound Tou ism 1995–2022
(12.2023): Tou ism S a is ics: Volume 1 (accessed 12 Decembe 2024).
0
10
20
30
40
50
60
70
80
0
20
40
60
80
100
120
140
Sha e o Asia (%)
Million ou is s
A ica Asia and he Paci ic
Eu ope La in Ame ica and he Ca ibbean
Middle Eas No h Ame ica
O he egions Asia's sha e ( igh )
0
10
20
30
40
50
60
70
Million ou is s
Hong Kong, China Thailand Japan Ko ea, Republic o Vie Nam
Singapo e Taipei,China Cambodia Indonesia Philippines
3
The impo ance o ou bound a el om he PRC a ies ac oss des ina ions. Tou is in lows om
he PRC we e mos i al o Hong Kong, China, as hey accoun ed o 66.7% o i s o al inbound
a i als. The ou is s om he PRC con ibu ed o o e 30% o he o al in e na ional a i als in
Palau (45.6%), he Republic o Ko ea (38.5%), Myanma (32.7%), Mongolia (31.7%), and Vie
Nam (31.2%) (Figu e 3).
Figu e 3: A e age Sha e o he People’s Republic o China A i als in Des ina ions in
Asia, 2015–2019
Lao PDR = Lao People’s Democ a ic Republic.
Sou ce: ADB calcula ions using da a om Uni ed Na ions Wo ld Tou ism O ganiza ion. Tou ism Sa elli e Accoun s.
h p://s a is ics.unw o.o g (accessed 12 Decembe 2024) in ADB. 2024. Asian Economic In eg a ion Repo .
h ps://a ic.adb.o g/aei 2024.
Looking om he expendi u e pe spec i e, since 2012, he PRC is he wo ld’s highes ou ism
spende . In 2019, wi h $254.6 billion in spending, 17% o global ou ism expendi u e was om he
PRC. The PRC con inued o lead in ou bound ou ism expendi u e a he peak o he pandemic.
Howe e , he eco e y o he PRC has been slow compa ed o o he ma ke s. By 2023, he Uni ed
S a es and Ge many al eady su passed hei p e-pandemic spending by a leas 20%. Meanwhile,
al hough he PRC emains he op ou ism spende , i s expendi u e in 2023 is 22.8% below i s
2019 spending (Figu e 4).
0%
10%
20%
30%
40%
50%
60%
70%
80%
4
Figu e 4: In e na ional Tou ism Expendi u e
PRC = People’s Republic o China.
Sou ce: UN Tou ism. Compendium o Tou ism S a is ics da a se . h ps://www.unw o.o g/ ou ism-s a is ics/ ou ism-
s a is ics-da abase (accessed 12 Sep embe 2024), and UN Tou ism. UN Tou ism Dashboa d
h ps://www.unw o.o g/ ou ism-da a/global-and- egional- ou ism-pe o mance (accessed 21 Janua y 2025).
Comme cial se ices impo s e e o he pu chase o se ices om o eign p o ide s by an
economy. Comme cial se ices include a el, which co e s “goods and se ices acqui ed om
an economy by non- esiden s du ing isi s o ha economy” (Uni ed Na ions 2011). The PRC is a
signi ican con ibu o o global se ices impo s. In 2019, 13.8% o global a el impo s and 3.2%
o o al global se ices impo s we e a ibu ed o he PRC (Figu e 5).
Figu e 5: Sha e o he People’s Republic o China o Global Se ices Impo s
PRC = People’s Republic o China, OECD = O ganisa ion o Economic Co-ope a ion and De elopmen , WTO =
Wo ld T ade O ganiza ion.
Sou ce: Au ho s’ calcula ions using da a om OECD-WTO Balanced T ade in Se ices da ase , OECD Da a
Explo e (accessed 21 Janua y 2025).
Consis en wi h he op des ina ions o he PRC’s ou bound ou is s, he bulk o he PRC’s a el
impo s we e om Asia and he Paci ic. Thei alue also shows a s ong p e e ence o
des ina ions in Eas Asia compa ed o o he des ina ions in he egion. Eas Asia consis en ly
0
50
100
150
200
250
300
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
$ billion
PRC Uni ed S a es Ge many Uni ed Kingdom F ance Aus alia
0
2
4
6
8
10
12
14
16
18
2015 2016 2017 2018 2019 2020 2021
%
Global Se ices Impo s Global T a el Impo s
11
Simula ion 3 es ima es he impac o he limi ed ou bound a el om he PRC o he economies
in Asia and he Paci ic. Since he 2022 da a on a el impo s, which a e exp essed in mone a y
alues, a e no ye a ailable in he OECD-Balanced T ade in Se ices da abase, his s udy uses
he change in ou ism lows om he PRC o des ina ions in Asia as a p oxy.
The model used in he s udy, based on a CGE amewo k, con ains all a iables in eal e ms.
E en hough he shocks used in simula ions 1 and 2 a e changes in mone a y alues, since hese
a e in eal e ms, he changes in ou ism lows show he same end in pe cen age e ms. The
implici assump ion is ha we cap u e jus he olume e ec s in e ms o shocks and o esul s,
wi h changes in p ice sepa a ely cap u ed in he model based on supply and demand in e ac ions
and mo emen owa ds equilib ium.
The model sepa a ely cap u es p ice changes and olume changes, which a e he same as alue
changes in eal e ms (cons an p ices). The pe cen change in alue (in cu en p ices) is he sum
o pe cen change in olumes (o alues in cons an p ices) and pe cen change in p ices. When
we shock he olume changes (simula ion 3), i is simila o he shock in alue changes in eal
e ms (simula ions 1 and 2). Essen ially, he esul s a e exp essed in changes in cons an p ices.
This en ails ha he model equa ions decompose all he alues in o p ices and quan i ies.
5.0 Resul s and Discussion
A co ela ion analysis be ween ou bound ou ism expendi u e and di e en mac oeconomic
a iables is unde aken o 2019. The co ela ions a e mo e han 0.7, which indica es ha
ou bound ou ism expendi u e has a high co ela ion wi h o he mac oeconomic a iables (Table
1). The esul s indica e ha ou bound ou ism expendi u e has a s onge co ela ion wi h ade
and domes ic c edi han wi h GDP o ade in se ices.
Table 1: Co ela ion be ween Ou bound Tou ism Expendi u e and O he Va iables
Ou bound Tou ism Expendi u e
GDP in cons an 2015 dolla s
0.85
T ade
0.92
T ade in se ices
0.77
Domes ic c edi by he inancial sec o
0.92
GDP = g oss domes ic p oduc .
Sou ce: Au ho s’ calcula ions.
The esul s o each o he simula ions a e discussed in he ollowing sec ions.
5.1 Simula ion 1: Business as Usual (2017–2018)
In simula ion 1, he esul s (Table 2) show ha while mos sub egions ha e miniscule change in
GDP, he Paci ic bene i ed om a 0.02% inc ease in GDP due o ou is s om he PRC. This
en ails ha in e na ional a i als om he PRC a e signi ican no jus o he ou ism sec o o he
des ina ions in he Paci ic bu also o hei g ea e economy. The inding is consis en wi h p e ious
li e a u e ha shows ha ou ism expo s as a sha e o GDP a e i al o he economies in he
Paci ic (Gup a e al. 2024). Mo eo e , he PRC is a key sou ce ma ke o he Paci ic, pa icula ly
Palau, wi h 45.6% o i s in e na ional a i als om he PRC (ADB 2024).

12
Simula ion 1 also e eals ha Eas Asia, which welcomed he highes olume o ou is a i als
om he PRC and is he la ges sou ce o he PRC’s a el impo s, enjoyed he highes absolu e
change in GDP ($125.04 million). Meanwhile, he GDPs o Sou h Asia and Cen al and Wes Asia
show he lowes absolu e change. This e lec s he ela i ely low ou ism lows om he PRC o
hese wo sub egions.
Table 2: Changes in GDP due o he PRC’s Ou bound Tou ism by Sub egion
(Business as Usual)
Sub egion
%
Change
Absolu e Change
($ million)
Cen al and Wes Asia
≈0
1.12
Eas Asia
≈0
125.04
Sou heas Asia
≈0
21.56
Sou h Asia
≈0
2.52
Paci ic
0.02
9.65
Oceania
≈0
11.41
PRC = People’s Republic o China, GDP = g oss domes ic p oduc .
Sou ce: Au ho s’ calcula ions.
Among subsec o s, change in expo s is highes o ec ea ional se ices in Eas Asia, Cen al
and Wes Asia, Sou h Asia, and Sou heas Asia. In Eas Asia, inc easing ou ism lows om he
PRC aises expo s o ec ea ional se ices by 24.83% and accommoda ion, goods and se ices
by 5.91%.
Meanwhile, while Cen al and Wes Asia a ac s a ela i ely small olume o isi o s om he
PRC, he ise in in e na ional a i als om he PRC has s ong in luence in he expo s o ou ism
indus ies such as ec ea ional se ices, and accommoda ion, ood and be e age se ices. In he
Paci ic, ou ism lows om he PRC helps ai anspo h ough expo s o ai anspo by 2.09%
(Table 3).
13
Table 3: Changes in Expo s o Tou ism Indus ies due o he PRC’s Ou bound Tou ism
by Sub egion (Business as Usual)
Sub egion/Sec o
%
Change
Sub egion/Sec o
%
Change
Eas Asia
Sou heas Asia
Accommoda ion,
ood and be e age se ices
5.91
Accommoda ion,
ood and be e age se ices
2.08
Ai anspo
-0.30
Ai anspo
0.18
Wa e anspo
-0.24
Wa e anspo
-0.08
Rec ea ional se ices
24.83
Rec ea ional se ices
8.59
Re ail ade
-2.00
Re ail ade
0.22
Cen al and Wes Asia
Sou h Asia
Accommoda ion,
ood and be e age se ices
6.53
Accommoda ion,
ood and be e age se ices
0.16
Ai anspo
1.73
Ai anspo
0.06
Wa e anspo
-0.08
Wa e anspo
0.83
Rec ea ional se ices
20.81
Rec ea ional se ices
10.46
Re ail ade
0.06
Re ail ade
1.25
The Paci ic
Oceania
Accommoda ion,
ood and be e age se ices
0.99
Accommoda ion,
ood and be e age se ices
1.08
Ai anspo
2.09
Ai anspo
0.81
Wa e anspo
-0.31
Wa e anspo
-0.10
Rec ea ional se ices
1.90
Rec ea ional se ices
3.79
Re ail ade
-0.40
Re ail ade
0.39
Sou ce: Au ho s’ calcula ions.
5.2 Simula ion 2: Slowdown in he PRC’s Ou bound Tou ism as a Resul o COVID-19
in 2020
Simula ion 2 es ima es he impac o he pandemic-induced slowdown o he PRC’s ou bound
ou ism o Asia and he Paci ic. The esul s demons a e ha he decline in ou ism lows om he
PRC has hu all sub egions. The indings on changes in GDP show ha he wo s hi sub egions
a e he Paci ic (-0.05%) and Eas Asia (-0.01%). In absolu e change, Eas Asia su e ed a massi e
loss in GDP ($526.57 million) (Table 4).
Table 4: Changes in GDP Due o Slowdown in he PRC’s ou bound Tou ism by Sub egion
Sub egion/Economy
%
Change
Absolu e Change
($ million)
Cen al and Wes Asia
≈0
-2.00
Eas Asia
-0.01
-526.57
Sou heas Asia
≈0
-76.00
Sou h Asia
≈0
-6.10
The Paci ic
-0.05
-19.47
Oceania
≈0
-59.47
GDP = g oss domes ic p oduc .
Sou ce: Au ho s’ calcula ions.
14
The d op in ou is a i als om he PRC has se e ely educed he expo s o accommoda ion,
ood and be e age se ices, and ec ea ional se ices. The nega i e impac can be clea ly seen
in Eas Asia, whe e he es ima ed change in expo s o ec ea ional se ices (-33.16%) and
accommoda ion, ood and be e age se ices a e highes (-24.47%) (Table 5).
No ably, in all sub egions, he change in expo s o ai anspo is hu by he slowdown in he
PRC’s ou bound ou ism. On he o he hand, in Eas Asia, he expo s o ai anspo a e helped.
Table 5: Change in Expo s o Tou ism Indus ies due o Slowdown in he PRC’s
Ou bound Tou ism by Sub egion
Sub egion/Sec o
%
Change
Sub egion/Sec o
%
Change
Eas Asia
Sou heas Asia
Accommoda ion,
ood and be e age se ices
-27.47
Accommoda ion,
ood and be e age se ices
-6.78
Ai anspo
2.05
Ai anspo
-1.45
Wa e anspo
0.99
Wa e anspo
0.23
Rec ea ional se ices
-33.16
Rec ea ional se ices
-12.06
Re ail ade
10.79
Re ail ade
-1.33
Cen al and Wes Asia
Sou h Asia
Accommoda ion,
ood and be e age se ices
-7.93
Accommoda ion,
ood and be e age se ices
-3.21
Ai anspo
-1.52
Ai anspo
-0.23
Wa e anspo
0.05
Wa e anspo
-0.76
Rec ea ional se ices
-11.88
Rec ea ional se ices
-6.43
Re ail ade
-1.37
Re ail ade
-2.25
The Paci ic
Oceania
Accommoda ion,
ood and be e age se ices
-2.53
Accommoda ion,
ood and be e age se ices
-4.03
Ai anspo
-1.67
Ai anspo
-1.53
Wa e anspo
0.52
Wa e anspo
0.09
Rec ea ional se ices
-7.94
Rec ea ional se ices
-6.52
Re ail ade
-0.66
Re ail ade
-2.07
Sou ce: Au ho s’ calcula ions.
5.3 Simula ion 3: G adual Easing o Ou bound T a el om he PRC (2021–2022)
The sligh up ick in ou is a i als om he PRC o des ina ions in Asia is due o he easing o
a el p o ocols o essen ial a el be ween he PRC and selec economies (Huld 2022).
Simula ion 3 es ima es he impac o he limi ed a el om he PRC du ing he pe iod o 2021 o
2022.
Simula ion 3 e eals ha he sligh g ow h o he PRC’s ou ism lows has he mos impac on
GDP in he Paci ic (0.02%). In absolu e change, all sub egions show g ow h, wi h Sou heas Asia
showing he bigges absolu e change in GDP ($81.7 million) ollowed by Eas Asia ($74.05)
(Table 7).
15
Table 6: Change in GDP Due o G adual Easing o Ou bound T a el om he PRC
by Sub egion
Sub egion
%
Change
Absolu e Change
($ million)
Cen al and Wes Asia
≈0
0.28
Eas Asia
≈0
74.05
Sou heas Asia
≈0
81.70
Sou h Asia
≈0
0.31
The Paci ic
0.02
1.99
Oceania
≈0
4.84
GDP = g oss domes ic p oduc .
Sou ce: Au ho s’ calcula ions.
The slow eopening o he PRC’s bo de s also mean he sluggish eco e y o expo s o ou ism
indus ies o he PRC. This is e lec ed in he indings, which show minimal change in expo s o
a el indus ies om Asia o he PRC. Based on he esul s, he change in expo s is mos e iden
in Sou heas Asia among he sub egions, whe e expo s o ec ea ional se ices (6.79%), and
accommoda ion, ood and be e age se ices (3.98%) bene i ed om he esump ion o ou bound
a el om he PRC, al hough i was limi ed. Change in expo s o accommoda ion, ood and
be e age se ices, and ec ea ional se ices in Eas Asia also show a sligh inc ease in expo s
(Table 8).
Table 7: Pe cen Change in Expo s o Tou ism Indus ies by Sub egion due o G adual
Easing o Ou bound T a el om he PRC (2021–2022)
Sub egion/Sec o
%
Change
Sub egion/Sec o
%
Change
Eas Asia
Sou heas Asia
Accommoda ion,
ood and be e age se ices
1.68
Accommoda ion,
ood and be e age se ices
3.98
Ai anspo
-0.05
Ai anspo
0.64
Wa e anspo
-0.04
Wa e anspo
-0.14
Rec ea ional se ices
2.06
Rec ea ional se ices
6.79
Re ail ade
-0.32
Re ail ade
-0.39
Cen al and Wes Asia
Sou h Asia
Accommoda ion,
ood and be e age se ices
0.56
Accommoda ion,
ood and be e age se ices
0.23
Ai anspo
0.05
Ai anspo
0
Wa e anspo
0
Wa e anspo
0.06
Rec ea ional se ices
0.86
Rec ea ional se ices
0.49
Re ail ade
0.04
Re ail ade
0.11
The Paci ic
Oceania
Accommoda ion,
ood and be e age se ices
0.79
Accommoda ion,
ood and be e age se ices
1.05
Ai anspo
0.48
Ai anspo
0.37
Wa e anspo
-0.17
Wa e anspo
-0.03
Rec ea ional se ices
2.52
Rec ea ional se ices
1.8
Re ail ade
-0.42
Re ail ade
0.05
PRC = People’s Republic o China.
Sou ce: Au ho s’ calcula ions.
16
5.4 Summa y o Resul s
The simula ions show ha he pe cen change in GDP is small ac oss sub egions. In absolu e
change, in all simula ions, he PRC’s ou bound ou ism has he mos subs an ial e ec on Eas
Asia’s GDP, a ibu ed o he high concen a ion o ou is s om he PRC in he sub egion
compa ed o o he des ina ions in Asia. The Paci ic sub egion shows he mos appa en pe cen
change in GDP, gi en he sub egion’s high dependence on ou ism, wi h isi o s om he PRC a
i al ma ke in ueling he sub egion’s ou ism de elopmen (Table 9).
Simula ion 3 clea ly demons a es he change in o al expo s in Eas Asia and Sou heas Asia
du ing 2021–2022 (Table 10). The inding e lec s he e ec o he in e en ions implemen ed
du ing he pandemic. Qua an ine-on-a i al policy was highligh ed as a key ac o de e ing
a ele s om he PRC o ou bound a el (Pa ulis-Cook and Wang 2022). To s imula e business
a el while minimizing he isk o COVID-19 ansmissions, he PRC signed ecip ocal as ack
ag eemen s wi h ce ain economies, including Japan, he Republic o Ko ea, and Singapo e. The
bila e al a angemen allowed business a ele s o en e wi hou unde going qua an ine
p ocedu es (Zhang 2021). The esul is also consis en wi h p e ious li e a u e ha sugges s ha
good in e na ional ela ions a e c ucial o main aining bila e al ou is lows and p omo ing ou ism
de elopmen (Jin, Qu, and Bao 2019).
Table 8: Change in GDP due o he PRC’s Ou bound Tou ism by Sub egion
Simula ion 1
(2017–2018)
(Business as usual)
Simula ion 2
(2019–2020)
(Slowdown)
Simula ion 3
(2021–2022)
(G adual easing)
Sub egion
%
change
Absolu e
change
($ million)
%
change
Absolu e
change
($ million)
%
change
Absolu e
change
($ million)
Cen al and
Wes Asia
≈0
1.12
≈0
-2.00
≈0
0.28
Eas Asia
≈0
125.04
-0.01
-526.57
≈0
74.05
Sou heas Asia
≈0
21.56
≈0
-76.00
≈0
81.70
Sou h Asia
≈0
2.52
≈0
-6.10
≈0
0.31
The Paci ic
0.02
9.65
-0.05
-19.47
0.02
1.99
Oceania
≈0
11.41
≈0
-59.47
≈0
4.84
GDP = g oss domes ic p oduc .
Sou ce: Au ho s’ calcula ions.

17
Table 9: Change in To al Expo s due o he PRC’s Ou bound Tou ism by Sub egion
Simula ion 1
(2017–2018)
(Business as usual)
Simula ion 2
(2019–2020)
(Slowdown)
Simula ion 3
(2021–2022)
(G adual easing)
Sub egion
%
Change
Absolu e
change
($ million)
%
Change
Absolu e
change
($ million)
%
change
Absolu e
change
($ million)
Cen al and
Wes Asia
≈0
3.05
≈0
-4.10
≈0
1.28
Eas Asia
≈0
57.40
-0.04
-521.95
0.01
167.21
Sou heas Asia
0.02
9.20
-0.01
-88.13
0.09
214.30
Sou h Asia
≈0
4.40
≈0
-6.60
≈0
2.41
The Paci ic
0.01
11.20
≈0
-14.17
≈0
9.39
Oceania
≈0
30.13
≈0
-79.98
≈0
69.91
Sou ce: Au ho s’ calcula ions.
6.0 Conclusion and Policy Recommenda ions
The s udy analyzes he impac o he changes in he PRC’s ou bound ou ism o Asia and he
Paci ic using a GTAP model. Th ee di e en simula ions a e conduc ed o examine he di e en
mac oeconomic si ua ions: business-as-usual scena io (2017–2018), pandemic-induced
slowdown o he PRC’s ou bound ou ism (2019–2020), and he g adual easing o ou bound a el
om he PRC (2021–2022).
The simula ions indica e ha he changes in he ou bound a el om he PRC ha e he g ea es
impac on he Paci ic sub egion, implying i s s ong eliance on he ou ism sec o and he PRC
as a key sou ce ma ke . Meanwhile, he ma ginal adjus men s in expo s as a esul o he
slowdown in he PRC’s ou bound a el a e mo e appa en in Eas Asia and Sou heas Asia.
Mo eo e , wi h he in oduc ion o as - ack a angemen s wi h selec economies ha eased
c oss-bo de a el du ing 2021 o 2022, he simula ion sugges s imp o emen in he GDP and
o al expo s o Eas Asia and Sou heas Asia.
The esul s o he s udy unde sco e he impo ance o di e si ying sou ce ma ke s o build
esilience in he ou ism sec o . S ong eliance on a limi ed se o ma ke s would make economies
in Asia and he Paci ic ulne able o ex e nal shocks, as obse ed du ing he COVID-19
pandemic. Thus, economies should iden i y new ma ke s and s eng hen hei linkages by building
anspo connec i i y and enhancing a el acili a ion h ough libe al ai se ices ag eemen s and
isa policy. In addi ion, des ina ions need o de elop new p oduc o e ings ha would a ac hei
a ge ma ke s. These would enhance hei a ac i eness and help expand he des ina ions’
ma ke base.
Aside om di e si ying sou ce ma ke s, s eng hening domes ic and egional ou ism (such as he
Associa ion o Sou heas Asian Na ions, Cen al Asia Regional Economic Coope a ion, o Sou h
Asia Sub egional Economic Coope a ion) can also help economies become mo e esilien o
ex e nal shocks such as inancial c ises, o pandemics. By encou aging local and/o egional
a el, economies can educe hei dependence on inbound ou ism lows om a single o limi ed
se o economies. Economies need o p epa e o po en ial c ises and become mo e adap able o
isks. One way is by using echnology and inno a ion. Fo example, by implemen ing digi al
18
solu ions, ou ism subsec o s can acili a e seamless a el, p omo e con ac less paymen s, and
enhance isi o expe ience.
Thus, while he PRC may con inue o be an impo an sou ce ma ke o many Asia and he Paci ic
sub egions, economies should build esilience in hei ou ism economy by iden i ying new sou ce
ma ke s, s eng hening domes ic and egional ou ism lows, and using digi al echnology o
seamless a el and be e a ele expe ience.
19
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