A Study on Relationship between Foreign Openness Degree and Inbound Tourism Development in China

Foreign Opening Degree is an important factor impacts the development of inbound tourism. In this paper, a demonstration analysis is made from the view of time serial, regional difference and case study, the results are follows: with the higher degree of opening door policy from 1985 to 2005, China’s inbound tourism has been growing and dependence of 5 key indicators are all over 0.79 and showed very good relevance at several turning points; furthermore, with the statistics of 2002, the relationship between the opening degrees of 31 provinces and their inbound tourism market shares are positive relevance, of which, Guangdong, Beijing, Shanghai, Fujian, Zhejiang, Jiangsu, Shandong and Liaoning are both inbound tourism advanced and economy exotic provinces; finally, a comparison study of 15 years of Shaanxi and Shandong Provinces is made to retell the same result.


Introduction
As the saying goes, "open your door to welcome the guest."China used to be a nation that closed her door to outside world before 1978, had few foreign tourists and thought little of cost or profit, the government took it as a kind of political and foreign affair.Since the implementation of open door policy in 1978, inbound tourism has been developing very quickly, the changes of 28 year's statistics has been seeing the synchronizing growth of China's contemporary inbound tourism and her more opening to the world, which could be indicated from inbound tourists, foreign visitors, the visitors from HK, Macau and Taiwan, the overnight tourists, tourist foreign currency receipts and their orders in the world.What's more, the tourism statistics of 31 provinces shows that from 1978-1995, China was a tourist destination of sightseeing affected more by tourist resources and their accessibility (Sun Gennian, 2003); from 1995 to 2005, China turns its tourism image to a business destination, consequently the inbound tourism strongly affected by foreign trade dependence and openness degree, and showed the phenomenon of "resource curse" (XU Kangning, 2006).Many writers has discussed the relationship between openness degree and Chinese economy growth, XU Helian, GUO Yan noticed Chinese gross economy as time changes (XU Helian, etc. 2003;Guo Yan, 2004), LAN Yisheng studied the regional differences of economic growth among the 31 provinces (Lan Yisheng, 2002), many leaders talked about the importance of open door policy to tourism development (Shao Qiwei, 2006), but the corresponding temporal study was little mentioned.In the fact, inbound tourism is a kind of typical export-oriented industry, restricted not only by resources and tourist service, but openness degree as well.Herein a temporal analysis of timetable and regional difference in China has been made to provide more information.

The resource of data and research method
Foreign Openness Degree (FOD) is a complicated system that involves politics, economy, science, education, history and culture and hard to measure.To make it available for research, based on economical openness, the opening degree is calculated by foreign trade dependence and foreign investment dependence as follows (Hu Zhi, Liu Zhixing, 2005): For the development level of inbound tourism, 5 most important performance indicators would be collected as total inbound visitors (TV), foreign visitors (FV), visitors from HK, Macau and Taiwan (HMTV) and overnight visitors (OV).Then, time serial analysis is done based on the 5 indicators to work out the relationship between foreign openness degree and inbound tourism, cross-section analysis is made based on the market share of visitors (or tourist receipt) of 31 provinces to find out the relationship between foreign openness degree and inbound tourism, of which, market share of visitors (MSV)=[Provincial market share of visitors / National total visitors]×100%, market share of tourist receipt (MSTR)=[Provincial market share of tourist receipt / National total tourist receipt]×100%, finally, a case study of Shaanxi and Shandong provinces is to confirm the result.All the inbound tourism statistics are collected from China Tourism Yearbook 1986-2005.

The relationship between foreign openness degree and inbound tourism in the past 20 years
Table 1 is the statistics figures of Chinese foreign openness degree and inbound tourism 1985-2004 where shows that China's foreign trade dependence degree and foreign openness degree have been turning higher, consequently the same trend of inbound tourism as inbound visitors, foreign visitors, visitors from HK, Macau and Taiwan, overnight visitors and tourist receipt, thus pushing the order of China's inbound tourism in the world forward.
Foreign trade dependence degree and foreign openness degree are explaining variables to discover the relevance to inbound tourism as shown in table 2. It's easy to find that inbound tourism goes very close with foreign trade dependence degree, as seen from the correlation coefficient of 5 indicators being over 0.916, that of overnight visitors even over 0.944; well, it's not that high with foreign openness degree (including foreign investment dependence degree), that of 5 indicators being over 0.796, that of overnight visitors over 0.831, indicating that foreign trade is an important inducing factor.

The Relationship between Foreign Trade Dependence Degree and Overnight Visitors
Overnight visitors are those who stay in China at least 24 hours, besides sightseeing, they do eating, staying, traveling, shopping and pleasuring, thus spending more and bringing about more tourist receipt and reflecting more of the development level of inbound tourism.Figure 1 is the changes of time serial between overnight visitors and foreign trade dependence degree where we could see that the latter advanced wave upon wave since 1985, from 1985 to 1994 is the 1 st pull-up period, from 1998 to 2005 is the 2 nd , correspondingly, overnight visitors also advanced significantly at the same time: from 7.13 Million person-time to 21.07 Million person-time at the 1 st period and 25.07 Million person-time to 46.81 Million person-time at the 2 nd .
Besides the long-term trend, good corresponding relationship could be found at several turning points: there was a "downward valley" in 1989 due to "6.4 Incident" (Sun Gennian, 1998), another valley in 1998 due to Asian Finance Crisis and the 3rd valley in 2003 because of SARS Crisis.

The Relationship between Foreign Trade Dependence Degree and Tourist Receipt
Tourist receipt is the most direct accountant indicator for tourism development.For most developing countries, tourist foreign currency is the main driving force of inbound tourism.Figure 2 shows the changes of time serial between tourist receipt and foreign trade dependence degree.As tourist foreign currency is a complicated system and hard to count, so the correlation is not that high as seen above, but the phases were still easily found: 1985-1994 is the 1st pull-up period of FTD, and that of tourist receipt appeared in 1989-1997, the dislocation of time lies in two reasons: the even tourist spending was pretty low before 1989 and the statistic caliber changed a lot in 1994; well the 2nd pull-up period for both existed between 1998-2004.As we see the turning points, the downward points of both appeared in 1989, 1993, 1998 and 2003; well the upward points of them are 1994, 2000 and 2004.

The Analysis of Spatial Differences of Inbound Tourism Market Share and Openness Degree among the 31 Provinces
Time and space is an interacted unity and the spatial differences would eventually reflect the time changes.Herein based on the inbound tourism market share and foreign openness degree among the 31 provinces to discuss the effect of foreign openness degree on spatial differences of inbound tourism as shown in Table 3.

The Analysis of Spatial Differences of Tourism Market Share of Inbound Visitors and Foreign Trade Dependence Degree
Tourism market share of inbound visitors involves many factors as tourist resources abundances, traffic accessibility, visitors' priority, besides, the provincial differences of foreign trade dependence degree (including foreign openness degree) due to economic contact and business tourism works the most.Let's look at figure 3, except for Guangdong and Tianjin, foreign trade dependence degree and tourism market share of inbound visitors of other 29 provinces has a fairly close relationship as the formula implies: MSV = -0.7311+0.1524×FTDr = 0.9348 (4) As Guangdong province locates by HK and Macau, also serves as visitors from Taiwan's main entrance to Mainland China, so its FTD is as high as 150% and shares 35.6% of inbound visitors' market, thus running the No. 1 in China; Beijing and Shanghai are the most prosperous metropolitan in China and their FTD are over 80% thus occupying over 6.9% of the market where foreign visitors take the lion's share, they are the 2 nd array of China's inbound tourism market; Fujian, Jiangsu, Zhejinag, Liaoning and Shandong are all seaside developed provinces whose FTD are between 47-27% and take 2.4-5.6% of the market, obviously they are the 3 rd array.The above 8 provinces have 71% of the whole market, over 2/3 of all.Tianjin City, on the other hand, although its FTD is 86.7%, she lies under the shadow of Beijing tourism (Yang Zhenzhi, 2003) and takes only 1.29% of the inbound visitors' market.
For other 22 provinces, FTD and MSIV are both low and could see two types: Guangxi, Yun'nan, Hubei, Shaanxi, Helongjiang and Hu'nan are abundant in tourist resources whose MSIV are between 3.48-1.4%;well others have fewer resources and MSIV are less 1.0%.

The Analysis of Spatial Differences of Tourism Market Share of Tourist Receipt and Foreign Trade Dependence Degree
As the average staying nights and tourist expenses differ, the market share of tourist receipt and visitors are not always the same.Based on the market share of tourist receipt and FTD of 2002, figure 4 implies that there exits a very close relationship as OLS formula tells: MSTR= 0.51529+ 0.07987 ×FTD, r = 0.88407 (5) Of which, Guangdong shares 27% of China's inbound receipt market; Beijing and Shanghai takes 6.96% and 7.93% of the inbound visitors' market and 16.8% and 12.2% of the receipt's respectively; Fujian, Jiangsu, Zhejinag, Liaoning and Shandong takes 2.4-5.6% of the inbound visitors' market and 2.5-5.9% of the receipt's.The above 8 provinces have 78% of the total receipt market, over 3/4 of all.The tourism of Tianjin, still under the shadow of Beijing and takes only 1.84% of the inbound receipt's market, it is exception.
The other 22 provinces' FTD is lower than 17.5% and shares less than 2.3% of China's inbound receipt's market.Of which, Yun'nan, Shaaxi, Guangxi, Hu'nan, Helongjiang, Hubei, Chongqing and Sichuang's FTD are between 6.7-11.9%and they take more than 1% of receipt's market; well, other 14 provinces like Hebei, Inner Mongolia, He'nan, Anhui, Xinjiang takes less than 1% of the market.

A comparison analysis of Shaanxi and Shandong
Shaanxi and Shandong have the similar quantity of population and area.Shaanxi lies in the middle of Mainland China, far from the ocean, with the major tourist resources of cultural relics, and its capital, Xi'an, is a famous historical and cultural city with world fame who's Terracotta Warriors and Horses Museum is regarded as the 8 th Wonder of the World.Shaanxi is a typical big tourism province with a long history of inbound tourism but develops pretty slow; Shandong, on the contrary, stands by the sea with both cultural and natural tourist resources, Mount.Taishan is the No. 1 of "5 Holy Mounts" and Confucius' Temple in Qufu is the sacred land of Confucianism.
Shandong is a newly developed big tourism province with a shorter history of inbound tourism but develops fairly fast.Now a case study to reveal more details is in Table 4.
Before 1994, both the quantity of inbound visitors and tourist receipt of Shaanxi are higher than that of Shandong, in middle 1980s, the order that of Shaanxi was No. 5-6 in China and that of Shandong was only No. 13-14, well in early 1990s, that of Shaanxi turned No. 8-9 and that of Shandong became No. 12-13.After 1994, Shandong runs much faster on the two factors thus in later 1990s, she caught up with Shaanxi; in the early years of new century, that of Shaanxi back fell to No. 12-13 and that of Shandong went up to No. 8-9.
On the background of fast-developing inbound tourism in China, the comparison of Figure 5 and Figure 6 would reveal the reason of the changes of the two provinces.Since 1995, the FOD of Shaanxi has been gradually going down and pushing her market share of inbound tourism and its order going downward; on the contrary, since 1991, the FOD of Shandong has been gradually going up and pushing her market share of inbound tourism and its order going upward.Although FOD does not synchronize with market share of inbound visitors, the impression is still strong enough to tell that the difference of FOD is the most important factor to differentiate the development of inbound tourism of the two provinces.
To quantitatively measure the above relationship, based on the statistics of 1991-2005, the formulas are shown as follows, due to the lagged time, the FOD of one year earlier was used to explain the market share of inbound tourism of one year later: Shaanxi: MSV(t)= 0.4871 + 0.27326 × FOD(t-1), r = 0.6956 (6) MSTR(t)= 0.5361 + 0.21816 × FOD(t-1), r = 0.7379 Shandong: MSV(t)= 0.9816 + 0.10696 × FOD(t-1), r = 0.7951 ( 8) MSTR(t)= 0.6316 + 0.11116 × FOD(t-1), r = 0.8430 Formula 6-9 reveals that FOD necessarily bound up with inbound tourism.Since 1995, the FOD of Shaanxi has been gradually going down and pushing her market share of inbound tourism and its order going downward; on the contrary, since 1991, the FOD of Shandong has been gradually going up and pushing her market share of inbound tourism and its order going upward.

Conclusion
Welcome guests sincerely, friends are all over the world.Inbound tourism is an extro-oriented industry, although the tourist resources, accessibility, tourists' priority, etc affect it; the foreign openness degree is always one of the key driving factors.Chinese modern inbound tourism started her history from the implementation of open door policy since 1978 and as China opens wider to the outside world, the competitiveness of her inbound tourism in the world goes stronger.Herein from the perspectives of time changes, regional differences and case study, the relationship was discussed to reveal the fact.During 1985-2005, China's inbound tourism is closely related to foreign openness degree, the correlation coefficient of major key factors are over 0.79, that of foreign trade dependence degree are over 0.91; the regional differences of inbound tourism of 31 provinces tell the same, 8 coastal provinces own the largest FOD and take 71% of inbound visitors and 78% of inbound tourist receipt; a comparison study of Shaanxi and Shandong provinces may reveal more details of the same conclusion.In short, FOD is always a basic presupposition for Chinese tourism to go in for international or regional competitiveness.

Figure 2 .
Figure 2. Changes of tourism receipt of inbound and FTD for 20 years.

Figure 3 .
Figure 3. Relation between market share of visitors and FTD

Figure 4 .
Figure 4. Relation between market share of receipt and FTD

Table 1 .
Statistics of Chinese foreign openness degree and inbound tourism 1985-2004 Note: Statistics from China Tourism Yearbook and China Statistics Yearbook.Of which, the figures of 2003 are only from Jan.-Oct due to SARS impact.

Table 2 .
Correlation between inbound tourism development and foreign openness degree in China

Table 3 .
Statistics of inbound tourism market share of TV, TR and FOD of 31 provinces in 2002