‘Economic Gift’ or ‘Carrot and Stick’: Challenges in Reviving Cross-Strait Tourism

Tags: Cross-strait relations, Taiwan tourism, China tourism, political strategy

Cross-strait tourism has become a highly politicized issue, with both mainland China and Taiwan leveraging it as a bargaining chip to gain a political advantage. Despite the clear economic benefits, reviving tourism exchanges remains fraught with complexities.


A Stalled Industry

The once-thriving cross-strait tourism industry has seen significant declines since 2016. Mainland tourists, who once made up nearly half of Taiwan’s annual arrivals, have dwindled due to heightened political tensions and pandemic-related restrictions. Tour operators in Taiwan, such as Ringo Lee, recall better days when large fleets of buses ferried Chinese tourists across the island. Now, those buses are sold off, and businesses struggle to stay afloat.


Steps Toward Revival

Recent developments hint at a potential thaw. At the 2024 Shanghai-Taipei City Forum, Shanghai’s Vice Mayor extended an invitation to Taiwan residents to visit Shanghai, suggesting that city-to-city tourism exchanges could serve as a trial run for broader cooperation. Analysts see this as a cautious yet promising step toward rebuilding mutual trust, though significant political goodwill is required from both sides to make it sustainable.


Economic and Political Implications

For Taiwan, the economic benefits of welcoming mainland tourists are undeniable. A resurgence in tourism could help address the island’s widening travel deficit, with more residents traveling abroad than international tourists arriving. Estimates suggest that this gap could result in a record NT$738 billion trade deficit.

However, analysts warn of over-reliance on mainland Chinese tourists. Past experiences show that Beijing’s restrictions on travel itineraries often limited economic benefits to a select group of operators. Moreover, China’s ability to “turn off the tap” at will poses significant risks.


Tourism as a Political Tool

Both sides have historically used tourism as a means to assert political influence. For China, allowing tourists to visit Taiwan is framed as an “economic gift,” while Taiwan’s government under the Democratic Progressive Party remains cautious of Beijing’s “carrot and stick” strategy. Despite public commitments to easing restrictions, political agendas often stall meaningful progress.


A Glimmer of Hope

Industry players, like Lee, express a desire for politics to take a backseat in cross-strait tourism exchanges, advocating for an open and free market similar to other destinations. However, experts believe this is unlikely given the entrenched political standpoints on both sides.

While the path to restoring cross-strait tourism remains uncertain, its revival would require both Beijing and Taipei to prioritize economic cooperation over political posturing—a challenging but not impossible feat.


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