BEIJING: A surge in foreign travellers strolling in Beijing’s Summer Palace and binging on Shanghai’s soup dumplings risks complicating the Chinese central bank’s efforts to ensure measured, orderly gains in the yuan.
Top tourism hubs including Beijing, Jiangsu and Guangdong have each seen a jump of about 40% in overseas visitors last year, resulting in double-digit growth in travel-related inflows, official data show.
With policymakers having vowed to lure even more tourists to the mainland, the drive has the potential to fuel a further advance in the yuan, which is riding its longest weekly winning streak in over a decade.
“Inbound tourism will likely become even hotter going forward and that can lead to more strength in the yuan,” said Xia Le, chief Asia economist at BBVA Hong Kong. “Chinese regulators may take more measures to slow the appreciation. I expect the yuan to end this year at 6.8 per dollar.”
Foreign visitors to the capital city of Beijing spent an unprecedented 50.6 billion yuan (US$7.3bil) in 2025, a 45% jump from the previous year.
Guangdong province, which benefits from its adjacency to Hong Kong, hosted more than 90 million travellers who spent over 200 billion yuan – a 54% surge from 2024.
Overall for the first three quarters of 2025, inbound tourism brought China an unprecedented capital inflow of US$38.2bil, according to the currency regulator.
While a stronger yuan is in sync with Beijing’s long-standing goal of internationalising the currency, authorities are cautious about rapid gains that can diminish the appeal of Chinese exports.
Already, a number of powerful tailwinds – including broad weakness in the dollar, China’s record trade surplus and renewed interest in domestic stocks – have propelled the yuan to its strongest level in more than two years.
Against this backdrop, flows from inbound tourism risk creating a headache that the People’s Bank of China can do without. The central bank has already been setting its daily reference rate weaker than market expectations since late November.
International visitors to the mainland fuel demand for the yuan by converting their foreign exchange into the local currency to pay for expenses like hotels, meals and shopping. — Bloomberg
