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Southeast region in China had the highest amount of the international tourists between
1995 and 2000, which was consistent with the increasing international trade activities in that area.
Northeast and Northwest regions had the lowest amount of the international tourists over the
same time period, yet they had the highest growth rate of the international tourist numbers.
Chinese government obviously invested heavily on transportation sector in the past decade.
While capital investment increased moderately in retail sector, food sector, tourism sector, and
recreation sector, the capital investment on hotel sector actually declined a little. The foreign
exchange earnings from the international tourists showed an impressive growth between 1995
and 2000 in all thirty-one Provinces. The Middle region and the Southeast region traditionally
attracted more tourists and businesses compared to other regions. The Northeast region and
Northwest region had the lowest foreign exchange earnings but their growth rates were actually
higher than other regions.
How about the economic impact of the foreign earnings on economic development
among all thirty-one Provinces? Are there significant differences in terms of the economic
distribution created by the increasing tourism activities among regions? It might be possible that
the development of the Tourism industry could reduce the economic gap among regions. The
changing but increasing economic inequality between coastal and inland regions since 1978 had
been more and more significant, since this inequality might jeopardize the future interests of
China associated with business development. The potential social and economic inequality
issues would also affect social stability as well as the decentralization of the economic power in
China (Wen, 1998). Tourism industry might be one the more appropriate solutions to improve
the market situation among all regions, to create new business opportunities for local
communities, and to promote economic growth in some of the least noticed regions in China.
Wen (2001) conducted a research to show that convergence in the economic activities were