Another trade war toll: number of mainland Chinese business travellers to US drops

Business trips to the US by mainland Chinese appear on track to decline in 2019 after years of growth, as escalating trade tensions bite deeper into China’s economy and worsen business ties between the world’s top two economies.

The arrivals by mainland Chinese business travellers dropped 1.9 per cent year on year in the first six months of 2019, the first such downturn since 2011, according to US Commerce Department data.

The decline comes amid a trade war that started in July 2018 and sharply lower investment in the US by Chinese companies. Investment has fallen by nearly 90 per cent since its peak in 2016, including a sharp drop in 2018 and early 2019, with more companies reporting lower revenues and thinner profit margins than a year ago, according to the results of an annual membership survey by the China General Chamber of Commerce-USA, announced in June.

The drop in business visits to the US by mainland Chinese, which had grown 40 per cent since 2011 to nearly 400,000 in 2018, also follows a plunge in tourist arrivals from China in 2018, the first drop in 15 years.

“Many of those Chinese who visit US on a business visa tend to combine business with leisure,” said Liu Peng, a professor of Asian hospitality management at Cornell University’s School of Hotel Administration. “They shop and even check out a few schools for their children on business trips. So the trade war does have an impact on the decline of business visitors. [The trade war] affects their business needs and their income back home as China’s economy is worsened by the trade war.”

The decline in business visits was expected to continue in the second half of the year, experts said, after tension between Washington and Beijing reached new highs on Friday with both sides slapping more tariffs on each other’s exports.