Summary of Key Points
In 2025, China's inbound tourism sector achieved remarkable results: a total of 154 million domestic visitors, with overseas tourists spending $131.1 billion, and travel service exports increasing by 49.1% year-on-year (1.6 times that of 2019). Inbound tourism represents not only numerical growth but also an essential "external demand boost" for the Chinese economy. It acts as a new window, allowing foreigners to spend money in China without competing with domestic residents' wallets, thereby filling a gap in domestic demand. Additionally, it generates foreign exchange to stabilize the currency rate, drives the upgrading of the service industry, and challenges foreign stereotypes about China, making it one of the most cost-effective growth drivers at present. The potential for inbound tourism is vast, but challenges such as cognitive biases, supply shortcomings, and a lack of diverse products must be addressed.
1. "Exporting Services on-Site": Generating Foreign Exchange to Fill Service Trade Gaps
Inbound tourism is essentially an export of services—foreigners come to China for accommodation, food, transportation, sightseeing, shopping, and entertainment, which means we are selling services to them and directly earning foreign exchange. Unlike manufacturing exports (where goods are sent abroad), inbound tourism results in foreign exchange staying within the country without the need for logistics costs.
In the past, China's service trade has been in deficit (we spent more on foreign services than foreigners did on ours; for example, Chinese tourists spend significantly more on overseas trips than foreigners do in China). However, travel service exports increased by 49.1% in 2025, far outpacing the overall growth rate of service trade, playing a key role in narrowing this deficit. This not only supports the RMB exchange rate with net foreign exchange inflows but also addresses weaknesses in the service trade sector.
Compared to other countries, China's inbound tourism revenue accounts for less than 0.5% of GDP, while in Thailand it exceeds 10%, and in Europe and America, it ranges from 1% to 3%. Based on this gap, there is a potential market worth 1-3 trillion yuan that could be tapped, potentially generating up to $300 billion in direct foreign exchange revenue by 2030, which could significantly change the structure of China's service trade.
2. External Demand Boosting Domestic Needs: Foreign Spending Benefits Our Industrial Chain and Employment
Domestic consumption recovery has been slow (residents are hesitant or unwilling to spend), but inbound tourism represents pure external growth. The money spent by foreigners does not come from Chinese residents' wallets but drives the entire industrial chain, including hospitality, catering, transportation, and retail.
Research shows that for every yuan earned by the tourism industry, it generates 4.3 yuan in related industries. In 2025, inbound tourism directly and indirectly created employment for 14.3 million people (such as tour guides, hotel cleaners, and small shop owners). More importantly, consumer preferences are evolving: foreigners are no longer just interested in the Great Wall and the Forbidden City; they seek services like acupuncture, premium dental care, Chinese language study programs, international music festivals, and esports events. These demands, which were previously met overseas, are now being met domestically, compensating for insufficient domestic demand.
This demand is also sticky: a German tourist who loves Chengdu's hot pot may bring friends back, and a Middle Eastern customer who saves on dental care may become a repeat customer. Word-of-mouth spreads through social networks, enabling growth without the need for government subsidies.
3. Person-to-Person Experiences: Breaking Stereotypes about China
Many foreign perceptions of China are shaped by Western media (such as perceived insecurity or inconvenience). The most effective way to change these is to let them experience China firsthand. Photos and videos of China's high-speed railways, safe streets at night, and convenient QR code payments shared on platforms like TikTok and YouTube are more convincing than official promotions. For example, the 144-hour visa-free transit policy allows foreigners to verify for themselves whether China is as described by the media. Such extensive interpersonal interactions contribute to a country's soft power; ultimately, international relations are built on individual experiences.
4. The "Catfish" Effect of Inbound Tourism: Driving the Service Industry Towards International Standards
Inbound tourism acts as a catalyst for the service industry to improve. Foreign visitors require multilingual signage, support for foreign bank cards, and accessible facilities, prompting attractions and hotels to meet international standards. Policies introduced in 2024 (such as facilitating card payments and multi-language reservations) are largely driven by inbound demand, benefiting both foreigners and domestic consumers.
Inbound tourism has also distributed tourist traffic from major cities like Beijing and Shanghai to secondary cities like Chengdu, Xi'an, and Zhangjiajie. In the first three quarters of 2025, Zhangjiajie welcomed 1.1298 million overseas visitors, a year-on-year increase of 24.7%, bringing foreign exchange revenue and job opportunities to remote areas, thus supporting rural development and shared prosperity.
5. A Trillion-Yuan Market Ahead, but Three Hurdles to Overcome
To achieve a trillion-yuan market, three issues need to be addressed:
1. Cognitive Biases: European and American markets still view China as unsafe or inconvenient; targeted overseas marketing is needed to change these perceptions.
2. Supply Shortcomings: There is a lack of multilingual service personnel, and some attractions do not support online reservations with passports; the qualifications for foreign-owned hotels are not fully relaxed.
3. Limited Product Diversity: There is a scarcity of high-quality products for health, educational, and cycling tours; government and industry collaboration is needed to develop these offerings.
While these issues cannot be resolved overnight, each one overcome brings us closer to realizing this potential market. In an era of global economic divergence and slow domestic demand recovery, inbound tourism offers a low-cost, high-return strategy that generates foreign exchange, creates jobs, boosts domestic demand, and enhances the country's image. It is nearly unparalleled in terms of cost-effectiveness.
In conclusion: Opening China to the world is like opening another window for its economy—beyond the window lies a steady stream of external demand, along with the services and sincerity we have prepared. When "Chinese services" become as trusted as "Made in China," the value of inbound tourism goes beyond GDP figures; it represents the comprehensive appeal of an open country.