The role of tourism in China’s economic system and growth. A social accounting matrix (SAM)-based analysis

Abstract

After the opening policy in 1978, China’s tourism increasingly took relevance, up to become an important industry in the last two decades. Despite this, no analysis has been conducted at macroeconomic level to check both tourism industry interdependencies and wealth creation. To fill this gap, in this paper we elaborated an innovative conceptual model for the theory-based analysis of the tourism phenomenon in China, having the Keynesian macroeconomic theory as the background and using an SAM as the model accounting representation, and conducted an original, comprehensive methodological analysis of China’s tourism industry. As the database, we used a purposively elaborated 2015 SAM for China with 19 industries, on whose basis we identified endogenous and exogenous accounts, set up an innovative impact multiplier model adjusted to them and conducted an economic analysis of tourism interdependencies never performed so far. Evidence shows that manufacturing, agriculture and trade industries provide a relevant support to tourism services production, and that tourism greatly contributes to value added/GDP and household income creation. Overall, tourism industry has direct policy management implications, representing a sector on which enterprises and government can profitably base their decisions, with exogenous tourism demand shocks positively activating China’s economic system and growth.