Another Government Sponsored Bull Market

“Canada Woos Chinese Tourists” reads a recent CBC News headline. Unbeknownst to most of us in the States, China deemed Canada an “approved destination” for Chinese tourists late last year. That’s an odd concept for some Western ears (more below), but the government’s blessing has nonetheless caused a flood of Chinese tourists…global recession be damned.

Specifically, Chinese tourists will spend some $48 billion in 2010, says the China Tourism Academy. That’s a 14% rise from 2009. According to a report released earlier this month from EMI Intl., Canada has become the No. 3 favored destination for Chinese tourists, behind Australia and Singapore.

Where will they go? Vancouver, of course. It’s the shortest flight from the mainland, there’s certainly plenty to do and a very significant Asian population must come as some comfort to visiting Chinese. (A politically incorrect Canadian might still refer to the city as “Hongcouver.”)

Our anecdotal proof: The line of Asian tourists we stood behind last night at Canadian immigration was impressive, to say the least. We would have snapped a picture for you on our cell phone…but even touching such a device in that area is, evidently, a matter of national security.

The savvy international investor might want to keep a lazy eye on China’s “approved destination” process. Without this government granted “status,” a country cannot host tourists from official Chinese travel agencies, and travel for Chinese tourists is a bit more restrictive. There are well over 100 nations on the list already, but obviously – judging by Canada’s recent inclusion, there’s room for growth.

There are some interesting “big brother” details if you’d like to look into this further, but we’ll leave it at this: As long as the China growth machine keeps churning, tourism-oriented companies in newly “approved” nations ought to do just fine.

Ian Mathias
for The Daily Reckoning