Tourism, economic growth and sustainable development in China

  • Yu Teng

    Student thesis: Doctoral Thesis

    Abstract

    Tourism development is recognised as an essential tool in promoting economic growth, however, it may also contribute to environmental degradation. Increased pressure for reducing CO2 emissions poses new challenges to policymakers to promote economic growth and environmental protection. Since 2010, 19 scenic areas in China have been declared as low-carbon tourism demonstration zones. It follows that investigating whether CO2 emissions originating in the tourism industry could, in fact, compromise sustainable development in China. Whilst this is a key concern to society, there are a limited number of studies that analyse the environmental impact of tourism and the validity of the tourism-led-growth hypothesis. The first empirical chapter explicitly tests the relationships between tourism development, economic growth and CO2 emissions in China, employing a Panel Vector Autoregressive Model to analyse regional data, 2006-2017. Results show that growing international or domestic tourism contributes to economic growth but still at the sacrifice of the environment.Moreover, rapid economic growth has led to widening income inequality and sustained poverty levels. On the basis that tourism growth has the potential to benefit poor people and reduce income inequality across regions by creating a wide range of employment opportunities and improving infrastructure capacities at the same time. In the second empirical chapter, I examine the issue of whether – in practice – tourism  development reduces urban and rural income inequality and contributes to alleviating poverty in China. I investigate the dynamic relationship between tourism, economic growth, income and poverty by utilising a Panel Vector Autoregression model, for the period 2000–2017 in various regions of China. This study will look at both domestic and international tourism; since domestic tourism represents a large section of the Chinese tourism market. Results indicate that both international and domestic tourism growth cannot reduce inequality between urban and rural households. Despite that tourism development reduces poverty by increasing the income of rural households, it widens the income gap - as urban households benefit more. In turn, tourism taxation policies should be revised and utilised as a means to further eliminate income inequality and poverty in the country.Finally, the last empirical chapter investigates the relationship between tourism and economic growth under the pressure of economic policy uncertainty. The relationship between tourism and economic growth has been well studied in previous researches. However, the macroeconomic factors have been recently argued with less impact on tourism but the uncertainty may have a significant impact on tourism development. During the high uncertainty time, whether the relationship between tourism and economic growth still exists will be a question. In this study, I use the monthly data covering the period from January 2000 to December 2019 in China. This chapter using the Time-varying parameter Vector autoregression model combined with stochastic volatility enables to capture of the co-movement between tourism stock return, economic growth and economic policy uncertainty during the sample periods and selected events with high economic policy uncertainty. The results indicate that even during the high uncertainty, tourism development still can promote economic growth and vice versa in China in a short period of time. The long-term tourism-led growth strategies will need to be carefully considered by the Chinese government and policy.
    Date of AwardJun 2021
    Original languageEnglish
    SupervisorAdam Cox (Supervisor) & Ioannis Chatziantoniou (Supervisor)

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