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Trade war, day 195: Chinese tourism to U.S. still growing

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The Chinese government’s warning about travel to the U.S. issued in July last year had no effect on the country’s outward-bound tourists:

  • New York City announced today that it attracted more Chinese tourists than ever in 2018: “The number of tourists from China rose slightly to 1.1 million [in 2018], up from 1.04 million [in 2017],” per the New York Times (porous paywall).
  • Los Angeles County also saw record Chinese tourism, with an even bigger bump in 2018 versus 2017: “Visitors from China set an all-time high of 1.2 million travelers, a 6.9% increase from the previous year, making Los Angeles County the top-ranked U.S. city for Chinese travelers,” per the Los Angeles Times.
  • In the early months of the trade war, it appeared that Chinese tourism was taking a hit, but by November, the U.S. Commerce Department was projecting a slight (2 percent) increase in overall tourism flow from China.
  • The final numbers for 2018 are not yet in, but if New York and LA are any indication, tourism may prove to be among the most reliable economic links between the U.S. and China.

Other cross-border industries, of course, have been majorly hit by the trade war. Most directly affected as a result of tariffs is trade in soybeans, cars, oil, and other products, which plummeted in the second half of 2018 and have only recently begun to rise again, though not yet to pre-trade-war levels.

Meanwhile, the increased investment restrictions as a result of the Foreign Investment Risk Review Modernization Act (FIRRMA), passed last August, has “made Chinese investment in any form of technology company virtually impossible,” China Law Blog writes.

  • Purchases of U.S. firms by Chinese ones totaled just $3 billion in 2018, according to Mergermarket, 95 percent down from its peak in 2016.
  • Foreign direct investment in the U.S. by China was also down 90 percent from 2016 to 2018, data from the Rhodium Group shows. Such investment in 2018 reached just $4.8 billion, whereas it totaled $29 billion in 2017 and $46 billion in 2016, CNBC reports.

Other links today related to U.S.-China relations, and China’s technological and economic reach:

“One of the fatal errors [made by the Soviets] is that they followed a political system with highly centralized power. Not every socialist country does that,” said Hu Deping, son of the late reformist General Secretary Hu Yaobang, whose death ultimately led to the infamous Tiananmen Square crackdown.

“Another [mistake] was their rigid economic system. By the same token, not all socialist countries must practice a planned economy,” he said.


Previously in SupChina’s trade war coverage:

Trade war, day 194: Lighthizer doesn’t see ‘any progress,’ but will meet Liu He

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Lucas Niewenhuis

Lucas Niewenhuis is an associate editor at SupChina who helps curate daily news and produce the company's newsletter, app, and website content. Previously, Lucas researched China-Africa relations at the Social Science Research Council and interned at the Council on Foreign Relations in New York. He has studied Chinese language and culture in Shanghai and Beijing, and is a graduate of the University of Michigan.

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