Chart of the Day: China’s Tourism Boom Slows

China's tourism boom is showing further signs of slowing amid government efforts to bolster domestic consumption as economic growth decelerates.

Revenue from tourism grew by 10.5% in 2018 to 5.97 trillion yuan ($853.9 billion), down significantly from 15.1% growth in 2017 and marking the slowest pace since 2008, according to data released by the Ministry of Culture and Tourism. There was also a slowdown in the growth of the number of trips made over the Lunar New Year holiday, as well as in revenue growth in the catering and retail sectors over this key festive period, official data showed earlier this week.

This comes as China's economic growth decelerates and the government releases measures to boost consumption. The tax-free income threshold was raised in October, and new tax deductions for spending on items including education and medical expenses came into effect on Jan. 1. In late January, the government also announced incentives to support sales of products such as cars and home appliances.

Meanwhile, the number of Chinese tourists travelling abroad continues to grow rapidly, and was up 14.7% in 2018, more than double the growth in the previous year and the fastest rate of expansion since 2014. “The boom in the outbound tourism market may exert additional downside pressure on the current account balance,” said analysts from Nomura, in a note commenting on fast growth in overseas travel over the Lunar New Year holiday. China's current account balance has been shrinking for years, in large part due to the increasing amount of money spent by its citizens while touring abroad.

More than 10% of working Chinese people — that's nearly 80 million jobs — are directly or indirectly supported by the tourism industry, according to the ministry, which estimated tourism accounted for more than 11% of China's total GDP in 2018.

Contact reporter Ke Baili (bailike@caixin.com)