Quarterly Business Magazine

China Imposes Taiwan Travel Ban in Warning Shot to President

Posted :
Tuesday, July 30, 2019 to Wednesday, July 31, 2019

In its latest effort to increase pressure on Taiwan, Beijing said it will suspend a program that allowed individual tourists from 47 Chinese cities to travel to Taiwan, citing the current state of relations between the two sides.

The ban is effective from Aug. 1, according to a statement Wednesday from the Ministry of Culture and Tourism, and means that Chinese nationals can only travel to Taiwan as tourists if they’re part of tour groups. The scheme had been in place since 2011 under the more China-friendly administration of former President Ma Ying-jeou.

The ministry’s statement didn’t provide any further details as to the reason for the ban. The unexpected move comes as China attempts to isolate Taiwan and Tsai Ing-wen, it’s independence-leaning president. The move may also be aimed at hurting her re-election chances in January’s presidential election.

China Foreign Ministry spokeswoman Hua Chunying declined to answer a question about the decision, asking reporters at a briefing in Beijing on Wednesday afternoon to talk to the relevant department for Taiwan affairs.

Taiwan’s Mainland Affairs Council condemned China’s move in a statement Wednesday, saying cross-strait tourism is an important way of promoting better understanding between both sides. It called on Beijing to discuss the issue with Taipei.

“This is a shock to all of us. We are all very worried about it,” Benny Wu, chairman of the Taipei Association of Travel Agents, said by phone. “This will have a huge impact on Taiwan’s tourism and economy. Hotels, restaurants will all be affected.”

Taiwan’s Tourism Bureau said in a statement Wednesday it regretted Beijing’s decision and hoped for a return to positive interaction with China.

Spending by foreign tourists accounted for about 2.2% of GDP in 2017, the last year for which data is available, according to the tourism bureau. China was the largest single source of people visiting Taiwan and accounted for almost one third of total visitors to the island in May 2019, according to a Bloomberg calculation based on data published by Taiwan’s tourism bureau.

Taiwan’s economy expanded 2.41% in the second quarter due to robust domestic demand, and if conditions remain the same, its full-year growth will be 2.34%, according to the statistics bureau. However, that forecast could be threatened by this ban and any other measures China takes.

Beijing claims democratically ruled Taiwan as part of it’s territory, although the island itself has never been governed by the People’s Republic of China. Under Chinese President Xi Jinping, Beijing has increased diplomatic and military pressure on the Tsai administration in an effort to force her to accept Chinese claims to sovereignty over Taiwan.

Recent patrols by Chinese warships and warplanes around Taiwan were highlighted in a Chinese national defense white paper released last week as a “stern warning” to independence advocates, a reference to Tsai’s Democratic Progressive Party.

“As Taiwan is holding a presidential election soon, it’s not surprising that China is banning its citizens from visiting Taiwan,” KGI Securities Investment Advisory chairman Chu Yen-min said. “It seems to be a routine practice ahead of elections as China doesn’t want its citizens to witness democracy. The ban is expected to have limited impact on Taiwan’s economy and stock market, as those hit are mostly not listed companies.”

By Bloomberg News

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