Taiwan Predicts 29% More Chinese Tourists

Tap for Slideshow
Photographer: Maurice Tsai/Bloomberg

A group tourists from Jiangsu province, China, shop for accessories at a night market in Taipei, Taiwan, on Saturday, May 8, 2010.

Close
Photographer: Maurice Tsai/Bloomberg

A group tourists from Jiangsu province, China, shop for accessories at a night market in Taipei, Taiwan, on Saturday, May 8, 2010. Close

A group tourists from Jiangsu province, China, shop for accessories at a night market in Taipei, Taiwan, on Saturday, May 8, 2010.

Photographer: Maurice Tsai/Bloomberg

Chinese tourists visit the Shilin night market in Taipei. Close

Chinese tourists visit the Shilin night market in Taipei.

Photographer: Maurice Tsai/Bloomberg

Chinese tourists pose for a photograph at the Taiwan National Palace Museum in Taipei. Close

Chinese tourists pose for a photograph at the Taiwan National Palace Museum in Taipei.

Photographer: Maurice Tsai/Bloomberg

Groups of Chinese tourists visit the Taipei 101 Mall in Taipei. Close

Groups of Chinese tourists visit the Taipei 101 Mall in Taipei.

Taiwan’s tourism bureau expects visitors from China to increase about 29 percent this year as the island allows individual tourists to visit from the mainland for the first time in more than six decades.

“This is something we have been preparing for a long time,” Alice Chen, deputy director at the Hotel, Travel and Training Division at Taiwan Tourism Bureau, said in an interview in Taipei yesterday.

The two sides agreed earlier this month to let individual tourists from Beijing, Shanghai and Xiamen visit from today, the latest step after opening the island to group tours and direct flights. As many as 500 tourists will be allowed to visit each day, pushing arrivals from the mainland to as high as 2.1 million this year from 1.63 million in 2010, Chen estimates.

“Cross-strait tourism economic benefits are more directly reflected in retail sales and the service industry, unlike trade agreements which may take longer for the effects to be felt,” Cheng Cheng-mount, chief economist at Citibank Taiwan Ltd., said yesterday.

China Airlines Ltd. (2610), Taiwan’s largest carrier, rose as much as 1.8 percent. EVA Airways Corp. (2618), the second-biggest, advanced as much as 1.4 percent. Formosa International Hotels Corp., island’s biggest listed hotel company, gained as much as 0.5 percent.

Latest Milestone

The move to allow individual visitors is the latest milestone in efforts to improve ties between the former foes. The two sides have been ruled separately since Chiang Kai-shek’s Kuomintang, or Nationalists, fled to the island after being defeated by Mao Zedong’s Communists in 1949.

Taiwan and China have signed 15 agreements since President Ma Ying-jeou took office in May 2008, pledging to focus on improving economic links and abandoning his predecessor’s pro- independence stance.

Ma permitted group visits in mid-2008. Allowing individuals may take Chinese arrivals to 4 million next year from less than 200,000 in 2008, adding $4.59 billion to gross domestic product by 2012, Barclays Capital estimates.

“A successful cross-strait tourism policy will definitely add points for Ma as he faces election next year,” Cheng at Citibank said.

Opposition View

Ma is aiming for re-election in January on a platform of improved economic links with China. The opposition Democratic Progressive Party, which viewed closer China ties as a threat to Taiwan’s autonomy and sovereignty, accused Ma of selling Taiwan short with a policy of rapprochement “boxed in a frame set by China.”

China, which views Taiwan as part of its territory, overtook Japan last year as the island’s largest source of tourist arrivals with 1.63 million visitors, up 68 percent from 2009.

Independent Chinese tourists may bring revenue of between NT$9.1 billion ($315 million) to NT$19.5 billion a year, if the 500 visitors spend an average $245.43 and stay for a week to the maximum 15 days, Chen of the tourism bureau said.

Spending from Chinese visitors, including businessmen, contributed to 0.72 percent of Taiwan’s GDP last year, Chen said. Tourism has attracted NT$79.7 billion of investment in hotels that are scheduled to be completed in two years, she said.

Tourist Index

Taiwan’s Taiex Tourist Index, which tracks businesses including Taipei-based Formosa International Hotels Corp. (2707), the island’s biggest listed hotel company, gained 27 percent in the past year. The benchmark Taiex stock index rose 13 percent.

In the first five months of this year, Chinese tourists alone brought in NT$24.4 billion of foreign exchange, according to data from the tourism bureau.

One of the must-see attractions for Chinese visitors is the Taipei 101, the world’s second-tallest skyscraper, owned by Taipei Financial Center Corp., according to a survey by the tourism bureau.

Luxury products, including jewelry, watches and bags, sold at the mall are sought after by Chinese visitors as they cost about an average 30 percent less in Taiwan, Daphne Lee, marketing director for Taipei Financial, said in an interview yesterday.

Mainland visitors accounted for about 12 percent of Taipei 101’s shopping center revenue last year, Lee said. She expects independent visitors to buy more at the shopping center than group visitors as they have more time to browse. Tour groups typically spend about 1.5 hours at the mall, and mainly at the 89th-floor observatory deck, she said.

China, which has more than 1,000 missiles deployed at locations opposite Taiwan, has threatened to invade if the island declares formal independence. The world’s second-largest economy is Taiwan’s biggest trading partner.

The island’s government forecasts economic growth will moderate to about 5 percent this year from a 24-year high of 10.88 percent in 2010. Officials have raised interest rates and approved property and luxury taxes to curb price pressures, while increasing wages to help people cope with higher costs.

To contact the reporters on this story: Adela Lin in Taipei at alin95@bloomberg.net Janet Ong at jong3@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net

Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.