A pointer to how large outbound China travel is becoming is provided by a credit card. China Union Pay, China’s own credit card, set up in 2002, is one of the fastest growing credits cards brands across the world, without any marketing campaigns about its buying power.

One reason for its massive increase is that the 34 million Chinese that traveled overseas last year all acted as unofficial brand ambassadors. In Australia, National Australia Bank has teamed with China Union Pay so that Chinese tourists can make EFTPOS purchases and ATM withdrawals with their credit and debit cards. Banks in the United States, Germany and Egypt are among the others following suit.

The travel industry worldwide sees China as the single most important development in world tourism. The Economist Intelligence Unit estimates there will be 60 million tourists from mainland China by 2010 and 100 million by 2015. On the other hand the WTO believes the 100 million figure will be reached later, in 2020. Either way it is an immense change in world tourism.

Last year, 15 countries and regions opened their doors to Chinese tourists. To date, Chinese travelers can visit 132 destinations. Among the newest to be approved are Oman, Morocco and Syria.

In a sense, everyone is trying to get into the act. Now Turkey is trying to attract tourists from China. Turkey only receives between 40,000 and 50,000 of the 132 million Chinese traveling the world each year. Even if two per cent of them went to Turkey each year they would represent half the tourist trade.

The United Arabs Emirate and China are close to signing the Approved Destination Status agreement. Under ADS, Chinese nationals will be able to obtain a single-entry visa to the UAE.

Once in full effect, it will significantly increase the opportunity, for example, for Dubai to push it’s attractiveness for tourism and MICE (meetings, incentives, conventions and exhibitions) markets. This, of course, could be a two way traffic.

Saudi Prince Alwaleed bin Talal Al Saud’s Kingdom Hotel Investments earlier this year bought the Swissotel Kunshan for $58 million. This 387 rooms is new in that it only began operating two years ago. Now Kingdom Holdings has reportedly earmarked $1 billion for investment in China’s booming hotel industry.
Source: TTN

There are three essential cards for residents in China to have. These are ‘electricity cards’ used for paying your electricity for your household, ‘gas cards’ for paying for the gas you need to cook, and ‘water cards’ for the water you need to wash and bathe. It’s one of the fundamental rules of living in China that households have to pay in advance, by filling up the cards.

Another Chinese rule that foreigners may find difficult at first is the practice of depositing security money. As travelers find out in China, even people staying at five-star hotels have to pay a deposit — about twice the hotel bill — when they check in. Or, more normally, sign a blank form for your credit card and a sum is then blocked by the hotel.

You get your deposit back when you check out and the card, when it works properly, is restored to normality.

This is part of the culture and foreigners living in China either get used to it or have niggling problems. And it is changing rapidly. With the advent of the Olympic Games the use of real credit cards will soar, especially in the cities. The number of stores where you can use credit cards is rapidly increasing. Few young people working at reputable workplaces fail to carry at least one credit card.

In fact, it is the start of a revolution. China plans to expand the use of bank cards to all commercial districts, star-rated hotels and travel resorts in big and mid-sized cities, targeting 30% of retail sales in three years. That, to use a favorite word of analysts, is a tectonic shift.

People’s Bank of China, in an industry guidance on its Web site, stated at least 60% of stores with annual sales of more than RMB1 million should accept bank cards by the end of 2008. The guide was published jointly by nine government bodies so you can take it as seriously official policy. It stated China will roll out tax incentives and lower transmission costs to promote the use of bank cards.

‘China’s card business is developing rapidly, with card issuance jumping, and usage environment greatly improved,’ the central bank said. ‘However, the industry is still in its infantry.’ That is, in fact, what it says. For ‘infantry’ read ‘infancy’ although, from experience, I can tell you the difference is not huge.

According to a forecast by MasterCard, the world’s second-biggest credit-card company China will have about 75 million credit cards that can be used in the international market by 2010, from more than three million currently. There might be an element of hopeful thinking in that forecast.

Citigroup, HSBC Holdings and American Express are among foreign institutions that have begun partnerships in China to start credit card businesses.

The slight suspicion of credit and credit cards that currently still prevails outside of the major cities is similar to the situation in Germany up until, say, 15 years ago when many hotels simply refused to recognize credit cards. Checks backed by a EuroCheck card, yes. Credit cards, no. That has now totally changed but it did not happen overnight. China’s credit revolution will be bigger and faster.
Source: Chosun News and The Standard