More foreigners than ever visited Taiwan in 2016 despite a dramatic decrease in Chinese tourists. That shows how the New Southbound Policy could also be effective in other areas.
When Ma Ying-jeou assumed the presidency in 2008, only 8 percent of all foreign visitors to Taiwan were from China. By 2015, over 4 million Chinese travelled to Taiwan annually, making up some 40 percent of total foreign visitors and contributing some US$7 billion to the Taiwanese economy.
Thus, when during her inauguration in May last year president Tsai Ing-wen failed to recognize the “1992 consensus,” one of Beijing’s immediate means to put pressure on Tsai’s new administration was ostensibly to decrease the number of Chinese tour groups visiting Taiwan.
A sharp decline in Chinese visitors was soon taking its toll on some actors in the Taiwanese tourism industry. This was manifested already in September last year, when some 10,000 frustrated people from the service sector took to the streets in Taipei, demanding more China-friendly policies in order to secure their income.
So it was hardly a surprise when new government data this February showed a 16.1 percent decrease in the number of Chinese visitors in 2016, with the number of tourists travelling in groups dropping by about 30 percent.
However, more importantly, the new statistics also put the total number of foreigners visiting Taiwan last year to 10.7 million — an increase of 2.4 percent from 2015 and a new all-time high.
This was, of course, made possible thanks to an almost 15 percent increase in visitors from other countries. The 1.9 million Japanese nationals who came to Taiwan last year accounted for 17.7 percent of all foreign visitors. They were joined by 880,000 South Koreans after a remarkable 35 percent increase in the number of South Korean visitors.
But the increase was bigger still from many Southeast Asian countries, the result, conceivably, of the so-called New Southbound Policy that was implemented in September 2016. The policy aims to enhance cooperation with 18 other countries in the region, including Australia and New Zealand, in order to make Taiwan less economically dependent on China.
One action has been the relaxation of visa policies for citizens of many of those countries. The number of Thai visitors, for instance, increased by 57 percent in 2016 due to the fact that travellers from Thailand and Brunei are eligible for a 30-day visa-on-arrival to Taiwan since last August (the same waiver was recently introduced for Singaporean and Malaysian tourists).
This diversification was hailed by President Tsai in a Feb. 9 tweet, where she expressed her gratitude for the record number of visitors to Taiwan in nine different languages, including Malay, Vietnamese and Hindi. And during a local tourism festival the same week, Tsai also presented three main pillars to promote tourism, including exploring “every possibility” to build a diverse travel environment.
And that will no doubt be needed. A closer look at the new data shows how the number of Chinese tourists actually increased last year until May, the very month that Tsai was inaugurated. According to statistics from the National Immigration Agency, the number of Chinese tourists then saw a whopping 33 percent dive in the May-to-December period.
According to statistics from the National Immigration Agency, the number of Chinese tourists saw a a whopping 33 percent dive in the May-to-December period.
Many media outlets reporting on those figures failed to make an important distinction, namely that between tourists and visitors coming to Taiwan for other reasons. Out of the 3.5 million Chinese who entered Taiwan last year, 78.8 percent were tourists, while others travelled for professional or academic exchanges or medical treatment. The decrease in tourists was slightly bigger (18 percent) than the decline in total visitors (16 percent).
This might seem trivial, but the distinction is very important when looking at countries such as the Philippines, whose 172,475 visitors to Taiwan last year represented an increase of 23.9 percent. But the increase in the number of Filipino tourists to Taiwan was almost 60 percent, which shows full well the potential for attracting tourists from the fast growing economies of Southeast Asia with new visa policies. Last fall, the Philippines was included in Taiwan’s e-visa program, giving its citizens the possibility of applying for tourist and other kinds of short stay visas online.
Moreover, since September, Filipino nationals holding resident permits or visas from the past 10 years from the U.S., Canada, the Schengen area, the U.K., Australia, New Zealand, Japan and South Korea can apply online for a three-month multiple-entry visa to Taiwan. The same visa on the same premises are also available for applicants from India, Indonesia, Myanmar, Vietnam, Cambodia and Laos, with strong growth figures in tourism as a result.
Hence, during the above-mentioned local tourism festival earlier in February, President Tsai rightly pointed out that the New Southbound Policy has been “progressing well.” This policy has been set in motion in other areas as well.
Last year, after reports that the China’s Taiwan Affairs Office called for cancelling academic exchanges between China and Taiwan as another measure to “punish” Taiwan’s new administration, the Taiwanese Ministry of Education submitted a report to the legislature with suggestions to promote exchanges in higher learning with Southeast Asian countries by using scholarships and internship programs.
This was later also echoed as one of the key measures in the New Southbound Policy, through the use of scholarships to increase the number of foreign students from the region by 20 percent annually to 60,000 by 2019. Today, about 10,000 Chinese citizens are enrolled in schools in Taiwan, representing about half of all foreign students at Taiwanese universities. Their share, if not sheer numbers, will no doubt be lower in the near future.
The New Southbound Policy is also aimed at the economy as a whole. Already in May last year, President Tsai was “bidding farewell” to Taiwan’s “over-reliance on a single market” by “going south” and promoting investment in ASEAN countries and India.
This over-reliance could be seen in the soaring trade between China and Taiwan under President Ma. In 2014, cross-strait trade amounted to US$130 billion, compared with only US$79 billion between Taiwan and the 10 ASEAN member countries, and US$6 billion between Taiwan and India.
While there is no doubt that some Taiwanese businesses are losing money due to the decrease in Chinese tourist groups, the 10,000 people who protested on the streets of Taipei last year can no longer claim to talk for the tourism industry as a whole. The new record figures in the number of foreign visitors to Taiwan shows without a doubt that the service sector also stands to benefit from not leaning entirely on China.
Additionally, the new statistics on tourism serve as proof of the initial success of the New Southbound Policy, creating hopes that the policy can also be successful in areas like trade and academic exchanges.
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