Chinese tourism's Happy-ish Holidays

Insight: China’s tourism sector continues to rebound, with travel during the upcoming weeklong National Day Holidays expected to double compared to last year. Short-haul destinations continue to dominate with Japan, South Korea, Thailand and Malaysia especially popular. Continental Africa is also emerging as an increasingly popular new destination, reportedly due to increased media coverage of ‘Belt and Road’ countries recently. 

Impact: While outbound travel booms, inbound travel is also seeing a resurgence from European and Asian tourists. However, travellers from the US, Oceania and South Korea continue to drop, with South Korean travel down by as much as 40%. Tense geopolitical relations and media depictions of China are clear drivers of destination choice but China is increasing efforts to attract inbound tourists. Recently, the tourism ministers of China, Japan and South Korea set a goal to reach 40 million tourists amongst the three countries by 2030, 10 million more than pre-pandemic levels. 

$386 billion

This is the US dollar sum India’s banks, financial institutions, investors and project developers have pledged to help the government reach its goal of more than doubling clean electricity capacity to 500 gigawatts by 2030.

Insight: On September 18, Nippon Steel “won” an extension from the US government on the country’s national security review of the Japanese steel giant’s proposed takeover of US Steel. The extension came as something of a surprise for media and pundits, given the deal has been vehemently opposed by President Biden, and both presidential hopefuls Harris and Trump. Nippon Steel now has another 90 days to sway Washington’s politicians to approve the deal. 

Impact:  US Steel is not an unwilling participant in the takeover, recently urging Washington to let the deal go through or risk “thousands of jobs.” Still, the political furore over the issue at least in part comes down to simple semantics: The name “US Steel” has come to represent American products and jobs on the whole, and politicians on both sides of the aisle fear appearing soft on a foreign company taking over an American institution would risk angering the US public. The 90-day extension pushing the decision back to after the election is also almost certainly no coincidence, granting both presidential nominees a reprieve from the thorny issue while on the campaign trail. The entire affair is another example of the importance of a good government relations strategy when it comes to mergers and acquisitions. 

Insight: Moo Deng, a baby pygmy hippo in a Thailand zoo has captured the hearts of millions worldwide with her charm and antics. Even Time magazine has dubbed her an “Icon and Legend”. Visitors to the zoo have doubled since her birth while brands like Sephora have released ad campaigns for pink and peachy blushes, just like Moo Deng’s cheeks.  

Impact: Moo Deng has become a key revenue stream for the zoo, and is also endorsed by the Thai government. Just like any new influencer, brands are quick to jump on new trends and leverage the surrounding hype. However, the baby hippo’s rise has not all been rosy – in light of mistreatment by visitors such as throwing shellfish at her or waking her up during naps, the zoo has already started to limit visiting times to 5 minutes per person and has promised to take legal action against those who misbehave. 

The patterns of China’s outbound investment are shifting, reveals a new report from Rhodium Group

Insight: Chinese foreign direct investment has rebounded over the past two years, but its velocity and direction have changed compared to pre-pandemic days. At US$103 billion of announced investments in 2023, it remains well below previous highs, says research group Rhodium which has been tracking Chinese FDI for many years. Almost three quarters of this is going into emerging economies, particularly in Asia, rather than the US or Europe. And more of it is being directed into greenfield ventures. 

Impact: It is no surprise that geopolitical tensions are affecting China’s overseas investment, with both the US and – increasingly – Europe scrutinizing new projects, particularly in clean energy and technology. Nor can its fallen real estate giants afford to snap up American property portfolios these days. But the shifting FDI patterns also suggest a deliberate attempt by Chinese companies to set up ‘finishing’ operations in countries like Vietnam and Indonesia – precisely to circumvent the tariffs being imposed on their goods in much of the developed world.

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