Enter The Dragon

China’s business travel market is growing fast – whatever the impact Trump’s trade tariffs may have.

- David Whitehouse

How will US president Donald Trump’s tariffs on Chinese products affect the Chinese business travel market? According to economic research consultancy TSLombard, the effect of greater global protectionism is likely to be that the world reconfigures into regional trading blocs, with an Asian bloc centred on China.

Trump’s hopes for the reshoring of manufacturing to the US are unlikely to be realised, TS Lombard says. China has the prerequisites to make an Asian-based trading bloc work without the US: a large domestic market, political support for open markets and manufacturing expertise. Could that in turn mean the regionalisation of Chinese business travel as doors in the US close?

GROWTH INDUSTRY

There’s a lot riding on predicting where the Chinese business traveller will be going. The Global Business Travel Association (GBTA) argued in August last year that despite the slowdown in China’s economy, the Chinese business travel market would be the world’s fifth fastest-growing market over the next five years, generating an additional US$129 billion in annual business travel spend by 2022. The Chinese market was predicted to outpace that of the US, which was forecast to grow slightly below the global average over the next five years.

Wouter Geerts, a travel consultant at Euromonitor in London, sees the potential for increased regionalisation of Asian travel. He argues that depreciation of the renminbi, a consequence of the trade dispute, will result in an increase in travel demand from neighbouring countries. About 80 per cent of all international trips in Asia-Pacific stem from within the region, and “it is likely that this will increase if relations with the US worsen”, he says.