A frozen waterfall in Jiuzhaigou of Sichuan province. Known as a fairyland on the earth, Jiuzhaigou is famous for its dozens of waterfalls and turquoise-colored lakes. China Photos / Getty Images
A frozen waterfall in Jiuzhaigou of Sichuan province. Known as a fairyland on the earth, Jiuzhaigou is famous for its dozens of waterfalls and turquoise-colored lakes. China Photos / Getty Images

China on course for soft landing



The Great Wall of China was packed with people, with barely any room to move. Behind them, this wonder of the world stretched off into the distance with tourists wedged right up against the sides.

Similar scenes were evident on Taishan Mountain in Shandong province, the most important of China's five sacred mountains, where ancient emperors used to pray. At one point, ticket booths had to be temporarily closed to curb the traffic.

It was even worse at Huashan, another important tourism site, where there was an outbreak of violence among impatient tourists waiting in a queue.

During the eight-day National Day holiday earlier this month, there were powerful signs of just how successful the Beijing government's efforts have been to boost domestic industries such as tourism.

"The official tourism data indicate a willingness of the public to pursue leisure and tourism. It remains robust," said Tao Dong, the chief regional economist for Asia Pacific at Credit Suisse.

While other countries do their best to attract outbound tourists from China, the Beijing government is focusing on the home-grown product, as a key part of efforts to boost consumption.

When it issued GDP figures this month, the National Bureau of Statistics reported that in the first nine months of the year, consumption amounted to 55 per cent of Chinese growth.

That means many analysts see evidence in the hordes of people thronging tourism hot-spots such as the Great Wall and the Forbidden City, that the Chinese economy is indeed heading for a soft landing.

A big factor behind the boom in this year's Golden Week holiday was the combination of the National Day break and the Mid-Autumn Festival.

"An eight-day super-long holiday, first-time exemption of highway tolls and a markdown in the ticket price of many scenic spots to woo visitors spurred Chinese people's tourism passion," said Zhang Weiguo, the director of the Economic Institute of the Shandong Academy of Social Sciences.

During the National Day holiday, 34.2 million "domestic" tourists visited China's 119 major historic sites, a 21 per cent increase during the eight-day holiday period. Admission revenues were up by a quarter.

According to local media estimates, retail sales increased 15 per cent year on year, slightly down on last year's 17.5 per cent, but still a robust performance.

"In our view, the official tourism data indicate that consumers have responded to the government's holiday policy," said Mr Tao.

"We think this is consistent with our 'soft-landing' view of the Chinese economy. The extent of congestion frequently reported is consistent with our view that the non-manufacturing sector offers new areas for efficiency gains and new opportunities for growth."

Lu Ting and Larry Hu, two analysts at the Bank of America Merrill Lynch in Hong Kong, are convinced the domestic tourism upturn is more evidence that the China growth story is set to continue.

"We are seeing an increasing amount of evidences for green shoots," said Mr Lu.

"This evidence comes from a wide range of sectors including transportation, commodity, exports, property market, credit and money data, tourism in Golden Week and restocking by manufacturing companies.

"Tourism data also point to a shift of consumption towards leisure, a new source of demand."

This switch is hardly surprising. Chinese people are curious about their country, and like to travel at home.

While overseas tourism has exploded, it remains an expensive option for most Chinese. The food is also often cited as a prime reason not to leave the country, while obtaining visas involves navigating through mountains of red tape.

But to help smooth the increase in domestic tourism, major changes need to take place. Mr Zhang has advocated a shift away from the rigid holiday structure, where people take time off at Chinese New Year and Golden Week in October.

This causes traffic chaos, with hundreds of millions taking to the road, the railway and to the air to get home or to head off on holiday.

The Golden Week holiday around May Day was abolished in 2007 and spread out during the year, but Mr Zhang has argued that workers need to have the flexibility to take paid leave at different times of year.

"The linchpin to capitalise on Chinese people's tourism passion is to implement the policy of paid leave and secure a mild and long-lasting incentive from the sightseeing demand," he said.

There are also calls for major investment at Chinese tourism sites to help cater for the boom in demand.

Most of the stimulus money invested in China has gone into upgrading the roads to tourism sites as well as the facilities there.

This has been especially evident in the west of the country, in Xinjiang and Tibet, which have benefited from major investment in tourism, not without controversy at times.

The number of attractions has also grown. Developers recently announced they were building a Buddhism-themed park near the network of caves at Dunhuang in the far west of the country at a cost of about 3 billion yuan (Dh1.76 bn).

It is the latest in a wave of theme parks, which includes a new Disney Resort near Shanghai.

In the next few years, the photographs of tourist crowds could soon be surrounding new cultural icons such as Mickey Mouse, as well as the ancient sites in the Forbidden City and the Great Wall.

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Rating: 5/5