‘Bigger payoff in developing China market’

The government should take advantage of China’s growing number of travelers and tap into the market, which could yield substantial income for the Commonwealth, according to the chief economist of the Hong Kong Shanghai Banking Corp.

HSBC chief economist George Leung said that tourist spending in Hong Kong amounted to about HK$100 billion last year. Leung projected that the figure would reach nearly HK$130 billion by the end of the year, HK$150 billion in 2006, and about HK$170 billion in 2007.

Although Hong Kong’s textile industry has suffered a decline with the rise of mainland China, the former British colony received a substantial 12 million of the 23 million Chinese travelers last year.

“Mainland tourists bring not only tourism business, but also liquidity,” Leung said. He said now is the right time to dip into the China market while Chinese travel is still taking off to ensure continuity of visitors from the market in the future.

Speaking before local businessmen at the Saipan Chamber of Commerce’s membership meeting at the Hyatt Regency Saipan’s SandCastle yesterday, Leung said economic development in China has resulted in the increase of wealthy Chinese people who are high spenders as tourists outside the country.

For the past decade, he said the number of Chinese travelers have been increasing every year. The annual has leaped from less than 2 million in 1994 to about 23 million in 2004. In 2000, the total registered at less than 6 million.

While Chinese arrivals into the CNMI have been increasing, the economist said the actual number only comprises about 6 percent of Saipan’s total arrivals in April 2005.

“The share from China remains small so far,” Leung said. “There’s not enough promotion or advertising of Saipan in China.”

Leung said that Chinese tourists could be a good source of income for the Commonwealth and could easily push up total visitor arrivals by 500,000 every year.

He said that, while it would be good to develop Saipan as an educational center in the Pacific, its net effect to local employment might not be significant, as it would entail contracting services of professional foreign workers. He also said that tourists usually spend higher than students, even though the latter would have to stay on-island for a longer time.

Earlier, Office of Insular Affairs economist Wali Osman stressed that developing the CNMI as an education hub in the region could translate to economic growth for the Commonwealth.

As demand for American language and business education in East Asia rises, Osman said there would be greater demand for American-style education and training. He said the market for higher education and instruction in English is quite large, especially in Asia, where 60 percent of the world’s population lives.

Leung said the rise of China as the world’s global factory has impacted the textile industry in Hong Kong and Taiwan. Singapore and Malaysia both face a similar fate, he said. China’s global manufacturing output has exceeded that of the United States, Europe, Japan and Asia.

“Bigger economies like Japan and South Korea have almost given up their own textile industry,” Leung said. “Asian manufacturing [is] still growing but shifting away from the traditional textile and electronic sectors.”