THE CHINA REPORT China continues in domestic tourism drive
With a quickly evolving DF&TR landscape in China there appears to be many opportunities on the horizon in this diverse yet highly-regulated market. However, this could mean that operators in popular tourist destinations outside of China might suffer, as the Chinese choose to holiday and shop closer to home. Charlotte Turner reports.
S
ome of the most significant opportunities for DF&TR companies in China are rising
from the continued expansion of the downtown duty free shopping landscape,
including off-shore
locations such as Hainan Island and the planned opening of border- crossing points. As reported by TRBusiness, China’s
Ministry of Finance has approved applications to open 16 duty free arrival shops in 10 international airports and at six land border crossing points, introducing limited competition to the nation’s growing duty free market for the first time. Four state-backed enterprises with
existing duty free retail operations have qualified to bid for the 16 arrival shop licenses that are due to be awarded during the next six months. [The four companies are: China Duty
Free Group (CDFG), China National Service Corporation For Chinese Personnel Working Abroad (CNSC), Shenzhen Duty Free and Zhuhai Duty Free.] Not forgetting the airports, major
investment for developments at Shanghai Pudong, Beijing Daxing, and Guangzhou Baiyun International among others – which will of course involve significant expansion in retail space – will see the Chinese airport sector’s worth rise to $22bn by 2020. This is all being supported by the
continued growth in the country’s economy, although the rate is slower than it once was, as has been widely reported. In early March the Chinese government revised its GDP growth forecast for 2017 to 6.5%, down from the 6.7% achieved last year, but it is still one of the highest growth rates in the world, as pointed out by the TFWA President, Erik Juul- Mortensen, recently. During his welcome speech at
the recent excellent China’s Century Conference in Guangzhou, Juul- Mortensen shared the words of Xi Jinping, President of the People’s
MAY 2017
The third China's Century Conference took place in China's third biggest city, Guangzhou in March.
Republic of China, which were particularly pertinent: “China’s economy has entered what we call a new normal, in which major changes are taking place in terms of growth rate, development model, economic structure and drivers of growth.” President Xi went on to state
that in the coming five years, China is expected to import $8 trillion in goods, attract $600bn of foreign investment and make $750bn- worth of outbound investment. Chinese tourists will make 700m overseas visits. “All this will create a bigger
market, more capital, more products and more business opportunities for industries such as ours,” added Juul-Mortensen, in Guangzhou.
speaking 2014
Momentum in middle class To bolster his argument for China’s potential, the TFWA President also highlighted findings from a report by McKinsey, which claims that by 2022, 75% of China’s total urban population will be considered middle class. “Given that China had an urban
population of 762m people in 2015, this middle class group is already hundreds of millions strong; large
2015 2016 (e) 2017 (f) 2018 (f)
“China’s economy has entered what we call a new normal, in which major changes are taking place in terms of growth rate, development model, economic structure and drivers of growth.”
Xi Jinping, President of the People’s Republic of China
TRBUSINESS 83
enough to be the third-most populous country in the world,” added Juul-Mortensen in March. Echoing
Juul-Mortensen’s
sentiments, the highly respected and award-winning author and expert on China’s middle class, Helen Wang told delegates later on during the
China GDP Growth OECD +7.3% +7.3% +6.9% +6.9% +6.7% +6.7% +6.4% +6.5% +6.1% +6.3% World Bank
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