Chinese tourists flock to Taiwan

For the first time since the civil war ended in 1949, Taiwan is preparing to allow individual tourists from China to the island.

According to Barclays Capital, the move could bring visitor traffic to Taiwan from China up to 4 million by next year. This is a huge jump from figures of less than 200,000 in 2008, when a ban on group trips was lifted.

The daily quota for Chinese tourists travelling in groups to Taiwan is 4,000, and the initial limit for individual Chinese tourists will be 500, according Taipei-based United Daily News.

Travel between Taiwan and Mainland China has also been made more accessible with direct flights between Taiwan and China opening up last year, cutting a 7 hour trip via Hong Kong to a mere 80 minute flight.

‘We believe that once the individual visitor scheme starts, the daily limit and other conditions will be loosened, benefiting the Taiwan hotel sector and retailers in the long term,’ said Yoshihiko Kawashima, an analyst at Daiwa-Cathay Capital Markets Co. Ltd.

Tourism to the island has boomed since organised groups of Chinese tourists were allowed to visit Taiwan, and allowing individuals to visit will spur up to $4 billion of investment into the industry in the next five years, said Taiwan’s top China negotiator Chiang Pin-kung.

With 1.63 million visitors, an increase of 68% from 2009, China overtook Japan last year as the island’s largest source of tourist numbers.

More than 2 million Chinese visitors to Taiwan since 2008 have delivered an NT$100 billion economic benefit, said Chiang, Chairman of the Straits Exchange Foundation.

The influx of Chinese tourists will bring business to the island’s hotels, restaurants and tourist facilities. A new Michelin-starred chain Din Tai Fung restaurant is set to open in the world’s second-tallest skyscraper, Taiwan’s Taipei 101.

‘We’ve been working overtime since March,’ said Chu Shuang-te, a manager at the dumpling restaurant, who hopes to finish the restaurant in time to open it with the arrival of the next wave of Chinese tourists to Taiwan.

Wai Ho Leung, an economist at Barclays Capital in Singapore, said that the increase in Chinese tourists to Taiwan will boost consumption and real-estate investment on the island, similar to what has been seen in Singapore since 2004.

‘The island’s commercial tie with China is crucial to raising its long-term economic growth potential,’ said Wai.