Appraising the Economic Impact of the “Opening up to Mainland Chinese Tourist Arrivals” Policy on Taiwan with a Tourism-CGE Model

Abstract

The purpose of this study is to establish a tourism-CGE model to appraise the "opening up to Mainland Chinese tourist arrivals" policy on Taiwan. Using the model, this study suggests that the multiplier effect of the Mainland Chinese tourists' expenditure in Taiwan is 1.378, which is slightly lower than that for tourists from Japan and Korea. With 1,000 (3,000) Mainland Chinese tourist arrivals per day, labour demand for about 48,000 (144,000) people would be created, along with 38,146 (114,463) million New Taiwan dollars volume of product, which would account for about 0.354% (1.063%) of annual GDP growth. The results also reveal that the policy would not necessarily contribute positively to every industry, and industrial restructuring might occur. Finally, some tourism policy recommendations are discussed.