(Bloomberg) --
China issued a travel advisory on the U.S. through the end of the year, the latest salvo in an escalating trade battle.
The country’s Ministry of Culture and Tourism cited recent “frequent” shootings, robbery and theft as the reason for its alert, the official Xinhua News Agency said on Tuesday. It didn’t provide any statistics or further details.
“Recently, U.S. law enforcement agencies have repeatedly harassed Chinese citizens visiting the United States through exit and entry inspections, door-to-door interviews and other means,” state-run China Central Television reported Tuesday, citing the foreign ministry. Asked if the move was part of the protracted trade dispute, Foreign Ministry spokesman Geng Shuang told reporters in Beijing it was a response to “current circumstances.”
Tensions between the U.S. and China have deepened in recent weeks, after trade negotiations between them fell apart in early May. The Trump administration has since blacklisted China’s crown jewel, Huawei Technologies Co., and is considering similar restrictions on more of the country’s tech firms. In response, China has threatened its own blacklist of “unreliable entities.”
What Bloomberg’s Economists Say
“It’s hard to gauge the potential impact on the U.S. Chinese tourists have become a big source of tourism revenue globally in recent years. The U.S. economy, though, is huge. The effect may not really move the needle.”
-- Chang Shu, Bloomberg Economics in Hong Kong
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China hasn’t issued a similar warning about travel to the U.S. in at least the past decade, according to a search of state-run media. The foreign ministry advised travelers last October that U.S. customs enforcement officers had the right to check their belongings such as bags, electronic devices and autos without a search warrant. It also issued safety tips to Chinese tourists travelling to the remote U.S. territory of Saipan after a typhoon in November.
Chinese tourism to the U.S. had been falling even before the advisory. Three million Chinese tourists traveled to the U.S. in 2018, down from 3.2 million the previous year, according to the National Travel and Tourism Office, which collects data from U.S. customs forms. But Chinese citizens still spent more while stateside: $36.4 billion in 2018 -- up from $35.3 billion the year before -- making them the biggest spenders of all international tourists.
Crimes Falling
The White House didn’t immediately respond to a request for comment Tuesday morning.
Major U.S. crime rates are falling, according to the Federal Bureau of Investigation. The number of violent crimes fell 4.3 percent in the first six months of 2018 from a year earlier, while murders fell 6.7 percent, robberies fell 12.5 percent and thefts fell 6.3 percent.
A total of 38,658 people died from gun-related injuries in the U.S. in 2016, the Centers for Disease Control and Prevention said in a report published in July of 2018. The death rate from gun-related injuries was 11.8 per 100,000 people in 2016, up from 10.1 in 2010 but below levels seen in previous decades.
Economic Weapon
China has a history of wielding tourism as an economic weapon against other countries. In 2017, it banned package tours to South Korea in a show of dissatisfaction over deploying a U.S.-backed missile system. The ban shaved 0.4 percentage points off Korea’s economic growth that year.
The Culture and Tourism Ministry issued a similar notice against traveling to Canada in January, as diplomatic ties frayed following Huawei executive Meng Wanzhou’s arrest in Vancouver at America’s request. It cited Meng’s detention as the reason for its advisory, urging Chinese tourists to fully assess the risks before traveling to the North American country.
The advisory came a day after China warned its students studying in the U.S. to be vigilant as the Trump administration steps up restrictions on academic visas and intensifies its scrutiny of Chinese researchers working in America.
The move will likely deepen the pressure already being felt by consumer and retail companies in the U.S. who’ve been traditionally reliant on big-spending Chinese tourists to prop up sales.
PVH Corp., the parent company of Tommy Hilfiger and Calvin Klein, plunged the most in a decade last week after trimming its revenue outlook. It blamed the escalating tariffs battle for causing anxiety for both American and Chinese shoppers.
American jeweler Tiffany & Co. said late last year that lower spending by tourists, particularly from China, to its flagship store in New York was a factor for its results missing analysts’ estimates. On Tuesday, it blamed lower tourist spending again for a shortfall in first-quarter sales.
Casinos and cruise lines would also feel pressure from the warning, as both industries have become increasingly reliant on wealthy Chinese tourists. China became the world’s biggest spender in international tourism in 2012 and its share has been growing ever since, according to data from the World Tourism Organization, a United Nations agency.
©2019 Bloomberg L.P.
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