Chapter 4: How Tourism Became a Bridge Between Singapore and China
Chapter 4, written by Chiang Min-Hua, is about how tourism exchange between Singapore and China grew from almost nothing into a multi-billion dollar flow of people and money in both directions. And the numbers in this chapter are genuinely surprising.
Chinese Tourists in Singapore: The 10x Growth
Here’s the thing. In 1990, when Singapore and China formally established diplomatic relations, Chinese tourists were barely a rounding error. By 1995, about 202,000 Chinese visitors came to Singapore. That was 3% of total visitor arrivals.
Fast forward to 2013: over 2 million Chinese tourists. That’s 15% of all visitors. A 10x increase in less than two decades.
Since 2003, China has been Singapore’s second-largest tourism source market, right behind Indonesia. And in 2013, Chinese tourists actually outspent Indonesian tourists for the first time, hitting S$2,981 million versus S$2,978 million. By just three million dollars, China became the number one source of tourism money for Singapore.
What fueled this growth? A few things. China gradually loosened travel restrictions for outbound tourism. Rising incomes meant more people could afford trips abroad. And Singapore kept reinventing itself as a destination. The country went through marketing phases: “Instant Asia” in the 1970s, “Shopping Paradise” in the 1980s, “Gastronomic Fantasy Land” in the 1990s, then “Uniquely Singapore” and “Your Singapore.”
But the real boost came when Resorts World Sentosa and Marina Bay Sands opened in 2010. Chinese visitor growth hit 25% in 2010, 34% in 2011, and 29% in 2012. Those casinos and resort complexes were magnets.
It wasn’t all smooth though. SARS in 2003 caused a 15% drop. The 2008-2009 financial crisis brought a 13% decline. And in the first half of 2014, Chinese tourists dropped by 30% because of the MH370 disappearance, kidnappings in Sabah, and political unrest in Thailand. Since many Chinese tourists visit Singapore, Malaysia, and Thailand on the same package tour, problems in one country affected all three.
Shopping: The Main Event
Here’s the most telling data point in the whole chapter. In 2013, Chinese visitors spent 47% of their total expenditure on shopping. That’s S$1,399 million on shopping alone, more than double what they spent on hotels.
For comparison: accommodation was 22%, food and drinks just 9%, and local transport 3%.
Their shopping tastes also shifted dramatically over a decade. In 2002, the top purchases were consumer electronics (29%), clothes, and jewelry. By 2013? Fashion and accessories (35%), watches and clocks (32%), and cosmetics (10%). Consumer electronics dropped to just 3%. Makes sense. China started making great electronics domestically, so why buy them abroad?
Why do Chinese tourists shop so much overseas? Chiang gives five reasons:
- Gift-giving culture. Buying “local brands” like Burberry or Scotch whisky as gifts for people back home is a big deal.
- High taxes on luxury goods in China. Luxury items in China cost 45% more than in Hong Kong, 51% more than in the US, and 72% more than in France. That’s a huge markup.
- Status signaling. For many Chinese, traveling abroad was still a privilege of the middle and upper class. Shopping abroad was proof you’d made it.
- Tour itineraries include shopping stops. Especially on “zero-dollar tours,” where travel agents make their money from commissions at designated shops.
- Distrust of domestic products. Many Chinese tourists preferred buying health products and high-end goods overseas because they trusted the quality more.
One more interesting detail. In 2013, 66% of Chinese visitors stayed in Singapore for only a day or less. Why? Package tours would route tourists through Singapore for shopping but have them sleep in Malaysia or Thailand where hotels were cheaper. Smart cost-cutting by the tour operators, but it meant Singapore captured spending money without getting the hotel revenue.
That pattern was slowly changing though. By 2013, 21% of Chinese tourists stayed 2-4 days, up from just 10% in 2002. And the purpose of visits was shifting too. Holiday visitors dropped from 61% to 40%, while business and MICE (meetings, incentives, conferences, exhibitions) visitors grew from 8% to 25%. People visiting friends and relatives went from 4% to 15%. The relationship was getting deeper.
Singaporeans Going to China
The flow goes both ways. China was Singapore’s third-largest outbound travel destination in 2013, after Malaysia and Indonesia.
The numbers are impressive for such a tiny country. Singaporean visitors to China grew from 37,400 in 1984 to over 1 million in 2011. To put that in context: Malaysia has five times Singapore’s population, but only had 240,000 more visitors to China than Singapore did. Thailand, the Philippines, and Indonesia all have much larger populations but sent far fewer tourists to China.
What explains this? Business ties. In 2012, 37% of Singaporeans visited China for sightseeing, but 18% went for meetings and business. That business percentage is way higher than Malaysia (10%), Thailand (6%), Indonesia (5%), or the Philippines (3%).
Popular destinations for Singaporeans in China were Beijing, Shanghai, and coastal provinces like Jiangsu and Zhejiang. Fujian was popular too, because of family connections. A lot of Singapore’s Chinese population has roots in Fujian. Yunnan was the go-to for the scenic inland trip.
Total spending by Singaporean visitors in China? S$943 million in 2013. About 5% of Singapore’s total outbound tourism budget.
The FTA Effect
Tourism didn’t just grow organically. Policy made it easier.
In 2007, the ASEAN-China Free Trade Agreement opened up tourism-related services between the two countries. Then in 2008, China and Singapore signed their own bilateral Free Trade Agreement, the CSFTA. This was the first full bilateral FTA that China signed with any Asian country.
The CSFTA, which took effect on January 1, 2009, specifically targeted tourism cooperation. China opened up hotel and restaurant operations, travel agencies, tour operators, sporting and recreational services, and maritime transport to Singapore investors. Both sides also simplified visa procedures and signed agreements for easier banking services (like the China UnionPay deal for Chinese tourists to use their bankcards in Singapore).
Singapore companies took advantage. By 2013, Singapore was China’s second-largest foreign investor after Hong Kong. And the investment pattern had shifted. In 2012, services made up 60% of Singapore’s investment in China, with manufacturing dropping to 38%. Real estate was the biggest services category at 33% of total investment.
Looking Ahead: Medical and Education Tourism
Chiang ends the chapter with some forward-looking observations about where tourism goes next.
For China, the big shifts are: the rising middle class in smaller cities (not just Beijing and Shanghai), young adults as a growing travel segment, and the move from group tours to independent travel. That trend toward independent travel creates demand for online booking services and personal travel planning.
For Singapore, the future is about high-value tourism rather than just more visitors. The country is small. It can’t compete on volume. So it needs to focus on areas where it has an edge.
Three areas stand out. Casino tourism pulls Asian visitors because of Singapore’s safety, convenience, and relative freedom compared to destinations where gambling is more restricted. Education tourism is growing because Chinese students are attracted to Singapore’s English-speaking environment and strong universities. And medical tourism has real potential, though Singapore has to differentiate itself from South Korea (known for plastic surgery), Taiwan (trusted for overall medical quality), and Thailand (budget healthcare).
Both countries set targets for 2015: Singapore wanted 17 million visitors and S$30 billion in tourism receipts. China was targeting 66.3 million inbound overnight tourists and 3.3 billion domestic trips. The tourism industry directly contributed 8.1% of China’s GDP and 5.8% of Singapore’s GDP in 2014.
My Take
This chapter is basically a story about how money follows people and people follow opportunity. Chinese incomes went up, travel restrictions went down, and Singapore positioned itself perfectly as a nearby, safe, shopping-friendly destination.
What I find most interesting is the shift in who these tourists are and what they want. The evolution from “budget group tour with shopping stops” to “independent business traveler staying multiple days” tells you something about how both countries are maturing. The tourism relationship started as package tours and duty-free bags. It’s becoming something more lasting: business connections, student exchanges, medical services, real estate investment.
For a small city-state, that kind of deep, multi-layered relationship with the world’s largest tourism market is a pretty good position to be in.
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