Malaysia’s Visa-Free Push for Chinese Tourists: Local Businesses Concerned

In a strategic move to invigorate its tourism sector, Malaysia is poised to introduce a 30-day visa-free stay for Chinese tourists, effective from December 1. This reciprocal measure follows China’s recent inclusion of Malaysia in its visa-free travel list for a one-year trial. The initiative aims to bolster tourism, a pivotal contributor to Malaysia’s economy, accounting for 14% of the Gross National Product in 2022. Notably, this comes after more than 3.1 million Chinese tourists visited Malaysia in 2019, making them the third-largest visitor group.

While the prospect of a resurgence in Chinese tourist numbers is promising, local tour operators express apprehensions about potential challenges. The concern revolves around the return of Chinese tourists favoring prearranged, all-inclusive packages, a trend prevalent before the pandemic. Chinese tour groups typically organized comprehensive itineraries from island-hopping to golfing holidays, often concluding with grand buffet spreads. Local operators worry about competition with these larger agencies that could limit opportunities for smaller businesses.

Malaysia Wary? Here’s Why

John Gong, a China Forum expert and professor at China’s University of International Business and Economics, anticipates a considerable increase in travel traffic between China and Malaysia. However, freelance tour coordinator Marilyn Lai suggests that the true benefit for local operators may lie in catering to niche markets with customized tour packages, focusing on more adventurous activities favored by independent travelers.

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The Malaysian interior ministry has announced a review of the visa-free scheme after one year to evaluate its impact and return on investment for the country. The ministry also emphasized a review of the initiative’s effectiveness and potential security risks associated with immigration facilities. This cautious approach aligns with heightened vigilance following incidents where Malaysian citizens were deceived by fake job offers, leading to involvement in scams orchestrated by Chinese gangs abroad.

Strict vigilance remains a priority as Malaysia aims to prevent any adverse repercussions, especially amid the recent rise in scams involving Chinese nationals. Malaysia detained over 1,000 scam suspects, including 300 Chinese nationals, in raids targeting call centers running scam operations. The government’s commitment to evaluating the initiative’s effectiveness and addressing potential security risks underscores the importance of balancing economic gains with security considerations.

The removal of visa requirements between China and Malaysia also presents an opportunity for Malaysian businesses to strengthen relations within China. Ong Tee Keat, chairman of the Centre for New Inclusive Asia think tank, emphasizes the need for Malaysian entrepreneurs to proactively engage in collaborative efforts with China. This includes participation in the Belt and Road Initiative projects, with Malaysia already involved in initiatives such as a US$1.5 billion rail project and other infrastructure developments.

While the removal of visa requirements aims to enhance bilateral ties and economic cooperation, Malaysia remains cautious about potential challenges. Striking a delicate balance between encouraging tourism, preventing security risks, and fostering economic collaboration is imperative for the success of this initiative. As Malaysia prepares for an anticipated surge in Chinese tourists, effective measures will be crucial to ensuring a secure, mutually beneficial relationship between the two nations.