Tourist stroll through a food stall at Raohe street Night Market in Taipei, Taiwan January 18, 2017. Photo: Reuters/Tyrone Siu
Tourist stroll through a food stall at Raohe street Night Market in Taipei, Taiwan January 18, 2017. Photo: Reuters/Tyrone Siu

The year 2018 was a challenging one for Taiwanese President Tsai Ing-wen and her Democratic Progressive Party (DPP), as they suffered major losses in the November elections amid a stagnant economy, flat wages, unpopular reforms, election interference from the mainland, and aggressive shows of force by China’s military.

Yet the year was not without some positive notes, including the welcoming of the 11 millionth tourist to Taiwan in 2018 late last month.  The tourist, a Japanese national, was welcomed at Taoyuan International Airport with two free air tickets, a three-day travel pass for Taiwan’s high-speed rail, and free accommodation at five-star hotels in Taipei, Hualien, Taitung and Kaohsiung.

The arrival marked the first time Taiwan has received 11 million overseas visitors in a single year, following 10.7 million visitor arrivals in 2017 and 2016, and 10.4 million visitors in 2015.

Significantly, the record-breaking number of tourist arrivals to Taiwan seems to contradict critics who argue that Tsai’s refusal to acknowledge the so-called “1992 Consensus” over the “one China” principle (whereby both Beijing and Taipei claim sovereignty over China) has “seriously harmed Taiwan’s travel industry.”

After the election of Tsai in 2016, Beijing actively sought to discourage mainland Chinese from visiting the island, resulting in just 2.3 million mainlanders visiting Taiwan in 2018, down from 2.7 million in 2017, and 3.5 million in 2016. Visits from the mainland peaked at 4.2 million in 2015, according to Taiwan Tourism Bureau data.

Seeking to replace the loss in visitors, Taipei pushed back with local subsidies and other efforts to encourage tourist arrivals from other nations in the region. As part of the government’s New Southbound Policy, visitors from six Southeast Asian countries were allowed visa-free entry to Taiwan if they held a resident card or visa for Australia, Canada, Japan, South Korea, New Zealand, any European Union or Schengen countries, the UK, or the US that had expired less than 10 years prior to their date of arrival.

Despite much publicity over 152 missing Vietnamese tourists, Taipei’s efforts to replace the decline in tourist arrivals from the mainland have apparently paid off. Arguably, an additional 1 or 2 million tourists might have arrived had it not been for Beijing’s discouragement, although a major push to attract other visitors might not have been implemented. In any case, tourism operators should be quite satisfied with the record numbers achieved in 2018 under the Tsai administration.

And tourist numbers could rise even further, now that a number of Chinese Nationalist Party (Kuomintang, or KMT) candidates have swept into power after the November 24 elections, many of whom seek to foster warmer relations with Beijing.

Kaohsiung looks to be the primary beneficiary of mainland arrivals, after the victory of KMT mayor-elect Han Kuo-yu, which overturned two decades of DPP rule. Han recently proposed the construction of an additional airport in Kaohsiung to handle an expected onslaught of tourists from China.

Taichung and Yilan county are also set to benefit, with Beijing likely to charter flights and divert Taipei-bound tour groups to those destinations, which voted for KMT candidates. Penghu, an outlying archipelago of more than 90 islands and islets, could also see an increase in mainland visitors arriving by ship, after the election of KMT commissioner Lai Feng-wei.

Should mainland Chinese indeed flock to Taiwan in 2019, tourism operators in KMT-led cities and counties could see significant increases in revenue – which will inevitably lead some to attribute the gains solely to the KMT’s attempt to warm relations with Beijing, while overlooking ongoing efforts to attract tourists of other nationalities under the New Southbound Policy.

Gary Sands is a senior analyst at Wikistrat, a crowdsourced consultancy, and a director at Highway West Capital Advisors, a venture capital, project finance and political risk advisory. He has contributed a number of op-eds for Forbes, US News and World Report, Newsweek, The Diplomat, The National Interest, EurasiaNet, and the South China Morning Post. He spent six years in Shanghai, four years in Ho Chi Minh City, and is now based in Taipei.

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