China to face $100b tourism deficit

Zhao Xijun, vice dean of the School of Finance and Economics under Renmin University, said the tourism deficit could help internationalize the Chinese renminbi currency as the yuan is converted and used internationally by a growing number of tourists.

For example, the most-visited overseas regions for Chinese, such as Southeast Asian nations, Australia and the Republic of Korea, as well as Taiwan, Hong Kong and Macao, have seen renminbi settlement business boom in recent years.

The internationalization of the yuan and Chinese cross-border consumption support each other, Zhao said,

The tourism deficit will offset a huge part of the trade surplus China accumulated through its merchandise trade.

The country posted a total trade surplus of $200 billion in the first eight months of 2014, an increase of 30.3 percent from a year earlier, according to customs data.

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