Not so sure in return of Youkus benefits S. Korean economy

It is expected that the inflow of Youkus or Chinese outbound travelers will only do so much to produce positive economic effects although China lifted bans on group tours to South Korea in six years and five months as China’s economic downturn derived from the real estate market has led Youkus to tighten their purse strings.

According to Reuters, there was a sharp drop of more than 60 percent in the number of Chinese travelers who visited Thailand, Singapore, Indonesia, and the Philippines in May – after Beijing's group tour bans were eased - compared to four years ago. A report issued by the Bank of Korea last Thursday also found that the number of Youkus recorded last month compared to 2019 was 44.3 percent in Japan, 37.3 percent in Thailand, and 37.1 percent in Indonesia, all of which were less than half the pre-pandemic levels.

Added to this, Chinese travelers have recently spent less since the economic slowdown hit the country. The Hong Kong Tourism Board revealed that only 19 percent of Chinese travelers visited Hong Kong in May to go shopping – down from 27 percent from 2017 to 2019. U.S. business channel CNBC wrote, “Many assumed that a torrent of travelers would be lining up to venture outside China after three years of harsh “zero-Covid” policies. Yet, many residents stayed home — either because they wanted to, or because it was too difficult and costly to leave the country.”

In March 2017, way before the outbreak of the COVID-19 pandemic, China imposed bans on group tourists to South Korea in retaliation for the deployment of the U.S. anti-missile system THAAD. Since it eased the bans on Aug. 10, South Korea’s tourism, retail, and food businesses have been looking forward to welcoming Chinese travelers and ensuring a long-awaited turnaround in sales. However, experts are concerned that China’s economic downturn can be a stumbling block down the road. Professor Kang Jun-young of the Graduate School of International and Area Studies (GSIAS) at Hankuk University of Foreign Studies said, “We can expect more Chinese travelers to come to the country. However, they, afraid to be financially insecure in the coming years, will likely save more and spend less.”


abro@donga.com