The effect of China's open-door tourism policy on Taiwan: Promoting or suppressing tourism from other countries to Taiwan?

Je-Liang Liou; Pei-Chun Hsu; Pei-Ing Wu

doi:10.1016/j.tourman.2019.104055

The effect of China's open-door tourism policy on Taiwan: Promoting or suppressing tourism from other countries to Taiwan?

Tour Manag. 2020 Jun:78:104055. doi: 10.1016/j.tourman.2019.104055. Epub 2019 Dec 9.

Authors

Je-Liang Liou¹, Pei-Chun Hsu², Pei-Ing Wu³

Affiliations

¹ The Center for Green Economy, Chung-Hua Institution for Economic Research, Taiwan.
² Accounting Office, National Taiwan University, Taiwan.
³ Department of Agricultural Economics, National Taiwan University, Taiwan.

Abstract

This study employs an extended gravity model to analyse the complementarity or competitiveness relationship of the number of inbound tourists and corresponding tourism revenue between China and 19 other nations under the implementation of China's Open-door Tourism Policy to Taiwan in 2008. A simulation for 2018-2021 demonstrates the sustained impact of this policy. The results show that the number of tourists to Taiwan from China reached its peak in 2015 at 41% and will decrease to 9% by 2021. The corresponding tourism revenue will decrease from 49% to 11% over the same period. The results also show that if the number of tourists from China remains above 836,772, the number of tourists from Japan, Hong Kong, Australasia, North America, and Europe will still increase. However, the number of tourists from South Korea and South and Southeast Asia will increase continuously regardless of tourists from China, even far below 836,772.

Keywords: Competitiveness; Complementarity; Extended gravity model; Marginal effect; Random effect model; Simulation.