Does Tourism Promote Economic Growth in the Ethnic Areas of China?

ABSTRACT

According to the tourism-led economic growth (TLEG) hypothesis, the development of tourism encourages economic growth. However, the effects of TLEG are not obvious in the areas of China predominantly populated by ethnic minority groups. The development of tourism might negatively affect factors of production because of local characteristics and hence impede economic growth. Panel data on twenty-nine provinces in China are examined to verify the TLEG theory in this study. The estimated generalized least squares (cross-section weights) method is applied to test the influence of tourism on human capital. Our empirical analysis shows that the development of tourism negatively affects human capital endogenously. Conclusions are provided at the end of this paper accordingly.

KEY WORDS:

• ethnic areas
• human capital
• tourism

JEL:

• O15
• O18
• Z32

Notes

1. China is a multiethnic country, with 56 ethnic groups that have been recognized by the central government. According to China’s 2010 census, the Han ethnic group accounts for 91.5% of the population. The remaining 55 ethnic groups are referred to as ethnic minorities.

2. In accordance with the Chinese constitution and laws, China has 155 designated ethnic autonomous areas, consisting of five autonomous regions, 30 autonomous prefectures, and 120 autonomous counties. In addition, it has more than 1,100 ethnic townships. The territory of ethnic areas comprises 63.9% of the country, and as of 2015 the population there makes up 13.54% of the total.

3. See the Report of Economic and Social Affairs in Ethnic Autonomous Areas, State Ethnic Affairs Commission of the People’s Republic of China, http://www.seac.gov.cn/art/2017/8/2/art_657_286119.html; China Statistical Yearbook 2016, National Bureau of Statistics, http://www.stats.gov.cn/tjsj/ndsj/2017/indexch.htm.

4. Ibid.

5. See China Statistical Yearbook 2016.

6. Calculated from data in annual Reports of Economic and Social Affairs in Ethnic Autonomous Areas released by State Ethnic Affairs Commission of the People’s Republic of China.

7. Calculated according to the China Statistical Yearbook.

8. See China Statistical Yearbook, 2016.

9. See the “Implementation Guidance on Standardizing the Management System for Educational Fees and Charges,” issued by Ministry of Education of PRC from 2006 to 2016.

10. According to a survey of migrant workers in 2017, 82.7% of migrant workers have nine or more years of education (National Bureau of Statistics of China, http://www.stats.gov.cn/tjsj/zxfb/201804/t20180427_1596389.html).

11. These regions cover most of the autonomous prefectures and counties in China. The percentage of prefectures is 92.21%, and the percentage of counties is 84.59%. All these areas cover 81.93% of the ethnic population.

12. Chongqing and Tianjin are not included because of the lack of data. Taiwan, Hong Kong, and Macao are excluded because their political systems differ from the mainland’s.

13. For all regions: e_m and e_s are stationary series while the rest of the variables are l (1).

14. The average number of years of education increased from 5.2 in 1982 to 10.5 in 2017. From the perspective of the education structure, the number of people with a senior high school education increased 3.02-fold while the number of people with a junior high school education increased 2.87-fold from 1982 to 2014 according to the Report of Human Capital of 2016.