Under the leadership of the newly elected President Lee Jae-myung, South Korea is expected to experience a significant rise in tourism exchanges with China, spurred by an anticipated strengthening of bilateral relations between the two countries. Industry insiders reported this expectation on Monday, noting that Lee’s pragmatic approach to diplomacy, which prioritizes national interests, could pave the way for improved tourism and economic cooperation with China. Throughout his campaign, President Lee repeatedly referred to China as “an important trading partner” and emphasized its significant influence on the security of the Korean Peninsula. His vision for managing Korea’s relationship with China includes the goal of stabilizing ties, which have suffered under the previous administration, and preventing the kind of antagonistic rhetoric that has characterized much of the recent diplomatic discourse.

In a televised debate during his campaign, Lee stated, “We should not neglect relations with China and Russia. There is no need to unnecessarily antagonize them as we have done in the past.” His remarks were a clear reference to the administration of former President Yoon Suk Yeol, whose tenure was marked by a stronger alignment with the United States, which, at times, resulted in tensions with Beijing. This cooling of relations between Korea and China over the past several years has had substantial consequences on the tourism industry. Notably, the number of Chinese tourists visiting South Korea nearly halved, dropping from 8 million in pre-pandemic years to just 4.6 million in 2024. This sharp decline had a profound impact on sectors that were heavily dependent on Chinese tourism, such as duty-free retail and local tourism businesses.

Political Tensions and Economic Impact on Korean Tourism

The downturn in Chinese tourist arrivals, while linked to the broader geopolitical shifts, also stemmed from specific events. The 2016 deployment of the Terminal High Altitude Area Defense (THAAD) missile system in South Korea became a flashpoint for deteriorating relations with China. In response to the missile deployment, China imposed a ban on South Korean cultural exports, and tourism restrictions were placed on Chinese travelers. This incident triggered a steep drop in the number of Chinese visitors to South Korea, plummeting from 8 million in 2016 to just 4.17 million in 2017. This demonstrated how vulnerable South Korea’s tourism sector can be to political tensions, particularly when a large portion of its tourism market is tied to one country.

The good news for the South Korean tourism industry, however, is that the diplomatic environment is expected to improve with Lee Jae-myung’s administration. Following recent gestures from China, such as the introduction of visa-free travel for South Korean visitors in November 2024, there are growing expectations for a rebound in tourism exchanges. The shift in policy has already started to show positive effects, with passenger traffic between Korea and China seeing a notable increase. According to data from Incheon International Airport Corporation (IIAC), passenger traffic on routes between Korea and China surged by 24.9 percent during the first five months of 2025, reaching a total of 4.68 million travelers. This growth has contributed to a broader increase in international passenger volume at the airport, which saw a 6.7 percent rise, with a total of 30.41 million international travelers recorded.

Increased Chinese Travel to Korea

The visa-free travel policy that China implemented for South Korean visitors has already begun to show results. In the wake of this policy, the number of Koreans traveling to China has surged, and, in particular, Chinese cities such as Shanghai have seen increased interest from South Korean travelers. During a recent extended holiday in early May, Shanghai ranked as the third most popular destination for flight reservations made on the Trip.com website in Korea. This shift highlights the reciprocal nature of tourism between the two countries and the growing willingness of Chinese travelers to explore South Korea once more.

The tourism industry, especially duty-free retail businesses that rely heavily on Chinese tourists, is optimistic about the prospect of a return to pre-pandemic levels of tourism. As tourism exchanges between Korea and China continue to improve, industry stakeholders are hopeful that duty-free sales will see a significant rebound. According to an official from the duty-free industry, “If the Korea-China relationship is restored by the new government, it will bring a positive impact to the industry,” adding that Chinese group tourism’s return could lead to a 30 percent increase in duty-free sales compared to pre-pandemic figures.

Restoration of Group Tours and Duty-Free Retail Prospects

The duty-free sector has long been dependent on Chinese tourists, and the return of group tours from China is expected to provide a significant boost to sales. As part of its efforts to rekindle tourism between the two countries, South Korea is planning to introduce a temporary visa exemption for Chinese group tourists starting in the third quarter of 2025. This move is aimed at encouraging Chinese travelers to visit Korea in groups, a format that had been popular in the past and led to significant economic contributions, especially in the retail sector.

For duty-free retailers, the priority now is to cooperate with the government to expedite the resumption of group tours and make the process as smooth as possible for Chinese tourists. Industry officials are keen on seeing the full restoration of these group tours, believing that this will be a critical factor in revitalizing tourism-related sectors, including retail and hospitality.

Expectations for Future Growth in Tourism Exchanges

Tourism industry insiders are optimistic that the momentum of improved relations between Korea and China will continue to drive growth in the coming years. One key factor that could further enhance tourism exchanges between the two nations is the potential visit of Chinese President Xi Jinping to South Korea. As part of the upcoming Gyeongju Asia-Pacific Economic Cooperation (APEC) summit, scheduled to take place from late October to early November, President Xi’s visit could serve as a significant diplomatic gesture, further solidifying the relationship between the two countries. According to travel insiders, such a visit would likely lower the psychological barriers for Chinese travelers who may have been hesitant to visit Korea due to the previous tensions. A high-profile visit by President Xi would signal to Chinese tourists that relations between the two countries have indeed stabilized, fostering greater confidence in the tourism market.

Moreover, the easing of diplomatic tensions between Korea and China is expected to have broader implications for the regional tourism market. With both countries being key players in the East Asian economy, the revival of tourism between them could have ripple effects across the broader region. Increased travel between Korea and China could encourage greater tourism flows between other East Asian countries, boosting the entire region’s tourism economy.

Tourism’s Role in Economic Growth

The tourism industry in South Korea plays an important role in the nation’s overall economic growth. Beyond its contributions to retail and hospitality, the sector provides jobs, drives infrastructure development, and contributes significantly to the nation’s GDP. In the past, South Korea has been one of the most visited countries in Asia, with China being a key source of tourist arrivals. As political tensions between the two countries began to subside, the tourism sector began to recover, and industry professionals expect that the pace of recovery will accelerate with the strengthening of diplomatic ties under President Lee Jae-myung’s administration.

The growth in tourism will not only have an economic impact but will also foster cultural exchange between Korea and China. South Korea is known for its rich cultural heritage, and the influx of Chinese tourists presents an opportunity to showcase Korean culture, history, and traditions to a broader audience. Similarly, the increase in Korean visitors to China will allow for greater cultural understanding and engagement between the two countries.

Challenges and Opportunities for the Tourism Industry

Despite the promising outlook for tourism exchanges between Korea and China, there are still challenges to overcome. For one, the global tourism landscape continues to evolve, with new competitors emerging as popular destinations for Chinese tourists. Other countries in Asia, such as Japan, Vietnam, and Thailand, are also vying for Chinese travelers’ attention. In order to maintain its competitive edge, South Korea will need to continue investing in its tourism infrastructure and marketing efforts to ensure that it remains an attractive destination for international visitors.

Additionally, the industry will need to adapt to changing travel preferences in the post-pandemic world. While group tourism has traditionally been a lucrative segment, there is growing interest in independent and experiential travel. To cater to these new preferences, South Korea’s tourism industry will need to diversify its offerings, including more personalized travel experiences, eco-tourism, and sustainable travel options.

Conclusion

The strengthening of diplomatic ties between South Korea and China under the Lee Jae-myung administration presents significant opportunities for the tourism industry. As relations between the two countries improve, tourism exchanges are expected to rise, bringing economic benefits and fostering greater cultural understanding. The tourism sector, particularly duty-free retailers, is already beginning to see the positive effects of these improved ties, and the introduction of visa exemptions for group tours is expected to accelerate this recovery. The potential visit of Chinese President Xi Jinping to South Korea later this year could further solidify these gains, signaling a new era of cooperation and tourism growth. The future of tourism in South Korea looks bright, as the country works to capitalize on the newfound opportunities for growth and development in the region.

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