How China’s Economic Retaliation Hurt the South Korean Tourism Industry

By Matt Stiles | | Topics: Economy & Finance, Social Media

I wrote this week about the one-year anniversary of China’s economic retaliation against South Korea over the THAAD missile system, a defensive weapon designed to stop North Korea’s medium-range missiles.

China objects to it and has been flexing its economic muscle in protest, carrying out an aggressive campaign of economic retaliation that includes sending fewer tourists. In 2017, just over 4 million Chinese visited South Korea, down from roughly 8 million a year earlier after several years of steady growth.

These charts show the effect on the South Korean tourism industry, which has grown to depend heavily on China. This first example helps show China’s increasing share among all tourists who visit South Korea. In 2016, for example, nearly half of all visitors were Chinese — way up from a decade ago:

This chart reflects the annual total visitors by Chinese since 2000. Until last year, annual growth had average nearly 30%, even with the 2015 MERS outbreak in South Korea, which caused hundreds of thousands — likely millions — of Chinese to stay away. You can see how the figure dropped dramatically in 2017:

And, finally, we look at the monthly data, which spikes during peak summer months. The effect of MERS is again evident, as is the significant drop in tourists after the Chinese implemented travel restrictions last March:

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