BEIJING — With the Chinese economy facing massive challenges, there have been concerns over its growth potential, at least in the immediate future.
Yet a key exception is emerging in the form of domestic tourism.
Last week's five-day public holiday to mark Labour Day saw 295 million trips made within China, according to figures from the Ministry of Culture and Tourism. This was 28% higher than pre-pandemic figures recorded in 2019.
The Transport Ministry's figures are also staggering: 92 million rail trips; almost 10 million air trips and 1.25 billion highway journeys.
However, this comes as international arrivals continue to lag, with foreigners currently entering China at barely 30% of 2019 levels. Why the disparity?
The beautiful historical river town of Wuzhen, a short drive from Shanghai, is considered one of China's top visitor sites for travellers of all types. When we arrive the little pathways and old bridges which cross narrow waterways are filled with visitors.
A popular thing to do in Wuzhen is to pose for photos dressed in traditional hanfu clothing - as if you have really been transported back hundreds of years.
Two women in their 20s, friends since high school, are visiting from Jilin Province in the northeast. After arriving, they spend an hour getting their hair done in an elaborate imperial-era style - and they are full of praise for Wuzhen's classical beauty.
We ask if, following the post-Covid opening up, many of their family and other friends have been traveling much? "Of course, after the pandemic, we're all visiting other places."
Nearby a local man who is selling ice-creams also says tourist numbers are "not that bad lately".
As good as before Covid? "Almost the same," he replies.
Shopkeeper Wang Ying, who sells traditional snacks, echoes this sentiment with a big smile on her face. "Business is going well, and it'll only get better."
All this will be seen as good news for the Chinese government. It's been saying that a push on domestic consumption can counter the significant faltering portions of the economy.
Major players in the once-mighty property sector are struggling to stay afloat, local government debt continues to rise, and persistent youth unemployment has left highly qualified university graduates uncertain of their future.
Amid all these challenges, the Communist Party has set a target of "around 5%" GDP growth for this year. Apart from the fact that analysts have long questioned the veracity of the country's official growth figures, economists are also asking how such a target can be reached, in any genuine sense, in 2024 without significant extra stimulus.
One lifeline could be a more buoyant travel scene which could bring broader business opportunities and greater service industry employment.
Schubert Lou, chief operating officer at travel agency Trip.com, told the BBC: "We've seen very strong domestic travel demand with search volumes in hotels up 67% compared to last year, and flight volumes up 80%."
Tourism industry consultant Peng Han from Travel Daily is following the investment trail to see how the business community really views the possibilities in the sector.
"With famous international hotel brands - like Intercontinental, Marriott and Hilton - you just have to look at their growth in China in 2023," he says. "Then check the performance goals for these large hotel groups in 2024 which have also been set relatively high. This shows that they are very optimistic about the growth potential of the Chinese market."
But, while the volume of local travelers might be up, Peng does point to the problem of per capita consumption which remains persistently low.
He says general uncertainty about the Chinese economy is putting more emphasis on saving, so people are looking for good value options. They are going on holidays and paying for things but doing so much more frugally.
This is where an increase in big-spending foreigners could help. But they are simply not traveling to China in the numbers they used to.
In 2019, nearly 98 million international visitors came to the country. Last year it was only 35 million - including business trips, students and the like. Lou describes the domestic versus international market as "uneven".
For many in the tourism industry here specializing in services for foreign travelers, "uneven" would be an understatement. Three years of harsh Covid prevention measures drove down arrivals from other countries, but that alone can't account for the current situation.
Huang Songshan, the head of the Centre for Tourism Research in the School of Business and Law at Australia's Edith Cowan University, blames this weakness in part to "the shifting geopolitical landscape globally".
In the peer-reviewed East Asia Forum, he pointed to a 2023 survey carried out by the Pew Research Centre, writing that, "Most individuals in Western nations hold unfavorable views towards China. The Chinese government's tightening grip on societal regulations could potentially cause discomfort for foreign travelers in China."
Official travel advice from some governments echo this sentiment, at times quite harshly.
Washington warns potential travellers to "reconsider travel to Mainland China due to the arbitrary enforcement of local laws, including in relation to exit bans, and the risk of wrongful detentions".
Australia advises "a high degree of caution" warning that "Australians may be at risk of arbitrary detention or harsh enforcement of local laws, including broadly defined National Security Laws".
The political environment has also taken a toll on flight availability and price. This is especially the case with connections to and from North America. Last month's 332 scheduled round trips between China and the US contrasts with 1,506 in April 2019.
As a result, finding a seat on a direct flight can be extremely difficult and those that are available are very expensive.
President Xi Jinping made a speech at a dinner on the sidelines of the Asia-Pacific Economic Cooperation conference in San Francisco last November addressing this point. "Today, President Biden and I reached important consensus," he told the crowd.
"Our two countries will roll out more measures to facilitate travels and promote people-to-people exchanges, including increasing direct passenger flights, holding a high-level dialogue on tourism, and streamlining visa application procedures. We hope that our two peoples will make more visits, contacts and exchanges and write new stories of friendship in the new era."
Washington has since increased the number of Chinese airline flights permitted to land - but only from 35 per week to 50. It is still well short of the 150 weekly trips pre-Covid.
The Biden administration is coming under pressure from unions and US airlines to not increase this any further because, they argue, Chinese airlines have an unfair advantage over them as they have state support; don't face the same onerous Chinese regulations; and, crucially, can fly over Russian airspace, making trips shorter and cheaper.
A letter to the US government from the Chair of the House Committee on China, Mike Gallagher, and the committee's top Democrat representative, Raja Krishnamoorthi, reads: "Should the US-China passenger carrier market expand without the US government addressing these significant issues, US aviation workers, travelers and airlines will pay a hefty price tag."
Lou says the frequency of international flight connections is definitely having an impact.
"What we are seeing right now, based on civil aviation data, is that inbound flight capacity won't get back to even 80% of 2019 [levels] by the end of 2024."
Then there are other potential turnoffs for those considering traveling in China, like the country's state-of-the-art phone app payment and booking systems which work very smoothly for Chinese citizens and residents, but which can be an enormous headache if you have just arrived.
There are certain sites, transport options, and purchases which can only be accessed via Chinese electronic apps which are, at times, only available in Chinese.
Professor Chen Yong at Switzerland's EHL Hospitality Business School is an authority on the economics of tourism in China. He thinks that hurdles relating to payment and booking apps can pose a real problem.
"Technologies such as social network websites, online maps, payment apps, among others, which foreigners have long been accustomed to using, are either unavailable or inaccessible when they travel to China," he says.
"On the other hand, there are Chinese alternatives to these technologies that remain inaccessible to foreigners due to language barriers and differences in user habits. We need to bridge this divide because it affects the tourist industry badly."
Back in Wuzhen, the presence of international travelers is much smaller than in years gone by, but there are still a few foreign faces in the crowd.
An Italian couple says the process of linking up to and using China's payment apps was a challenge but that it was not insurmountable, though they add, with a laugh, that it is "much, much, much easier" if you have a Chinese friend to help you.
Eliseo, from California, says he has had problems making payments to small vendors who don't accept credit cards and really no longer deal with cash. Another hurdle for him has been his bank at home which has blocked some payments, flagging them as potentially fraudulent coming from China.
Chinese officials have acknowledged that the foreign traveller numbers have been low but they are now trying to turn this around.
One way they're attempting to attract more foreign visitors is by increasing the number of countries whose citizens don't need a visa to enter. Trip.com says this resulted in an almost immediate increase in passenger arrivals from Southeast Asia.
In 23 Chinese cities, transit passengers from more than 50 countries are also able to stay for a few days visa free if they have an onward ticket. In Shanghai, hotels above a three-star level have been told that they should prepare to deal with international credit cards and an initial batch of 50 taxis have also started accepting them.
However, Professor Chen says "it would be too optimistic to envision a long-term growth in China's inbound tourism".
"The key is to establish a culture that puts service providers in the shoes of foreign tourists. They should imagine themselves being a foreigner who can't speak or read Chinese and who doesn't have a Chinese mobile number, payments apps and so on."
He says that the culture around this can't be changed overnight.
Yet, in places like Wuzhen - where the local travelers have already returned - the tourism companies are hoping that incredible sites like theirs will eventually be too much for foreigners to resist as well. — BBC
