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Taiwan Predicts More Chinese Tourists in 2011 as Rules Ease

Taiwan Predicts More Chinese Tourists in 2011
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

June 28 (Bloomberg) -- Taiwan’s tourism bureau expects visitors from China to increase about 29 percent this year as the island allows individual travelers from the mainland for the first time in more than six decades.

“I want to take this opportunity to see my friends in Taiwan during my four-day trip,” Chen Yibin, who has visited the island eight times on group tours, said as he stood on the 89th floor of the Taipei 101 observation deck. “I couldn’t move around on my own when I was part of a group,” said the 45-year-old worker at Xiamen C&D Corp.

The two sides agreed this month to allow individual visitors from Beijing, Shanghai and Xiamen starting today, the latest step in improving ties after opening the island to group tours and direct flights. As many as 500 tourists from China 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, according to Alice Chen, deputy director at the Taiwan Tourism Bureau’s Hotel, Travel and Training Division.

“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 in Taipei yesterday.

Travel-Related Shares

China Airlines Ltd., Taiwan’s largest carrier, rose as much as 1.8 percent in Taipei trading today and EVA Airways Corp., the second-biggest, climbed as much as 1.4 percent. Formosa International Hotels Corp., the island’s biggest listed hotel company, gained as much as 0.5 percent.

Taiwan’s Taiex Tourist Index, which tracks businesses including Formosa International, has advanced 26 percent in the past year and the benchmark Taiex index has added 13 percent.

“This is something we have been preparing for a long time,” the tourism bureau’s Chen said in an interview in Taipei yesterday. Taiwan will review in three months whether the number of tourists and cities should be increased, she said.

The move to allow individual visitors is the latest milestone in efforts to improve ties between the former foes. China and Taiwan 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.

China views Taiwan as part of its territory. The two sides have signed 15 agreements since Taiwan President Ma Ying-jeou took office in May 2008, pledging to focus on improving economic links and abandoning his predecessor’s pro-independence stance.

Gain of $4.59 Billion

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

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

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

Independent Travelers

China overtook Japan last year as the island’s largest source of tourist arrivals. In the first five months of this year, Chinese tourists alone brought in NT$24.4 billion ($844 million) of foreign exchange, according to the tourism bureau.

Independent Chinese tourists may bring in revenue of between NT$9.1 billion and 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 by 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 scheduled to be completed in two years, she said.

“Buying cosmetics, fashion accessories and tasting local fruits are the main targets of my first visit to Taiwan,” said Zhu Hangyu, 26, who works at a hotel in Xiamen. She and her friends plan to visit Sun Moon Lake during her three-day stay.

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

Chinese tourists may help boost revenue at Taipei 101 by 30 percent next year, with some mainland visitors spending as much as NT$10 million each, Michael Liu, a spokesman at Taipei Financial, said at the mall today. Luxury products sold at the mall are sought after by Chinese visitors because they cost about 30 percent less on average than in China, Daphne Lee, Taipei Financial’s marketing director, said yesterday.

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 in Taipei at jong3@bloomberg.net

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

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