South Korea Introduces Visa-Free Policy for Chinese Tourists

The visa-free policy is expected to bring a substantial economic boost. Chinese tourists are known for high levels of discretionary spending, particularly in luxury retail, cosmetics, duty-free shopping, and gourmet dining. The Korea Tourism Organization projects that the policy could attract an additional 1.5 to 2 million visitors within the first 12 months, generating up to $4 billion in direct spending.

Financial markets have already reacted positively. Shares in major South Korean retailers, duty-free operators, hotel chains, and beauty product manufacturers surged following the announcement. Lotte Duty Free, Hotel Shilla,  all recorded significant stock price gains, reflecting investor optimism over a potential influx of Chinese demand. Casino operators, particularly in Jeju Island—where many Chinese tourists visit—are also expected to see revenue spikes.

The move carries diplomatic significance. The administration of President Lee Jae Myung has been recalibrating foreign policy to improve ties with Beijing after years of strained relations under the previous, more pro-U.S. government. By introducing visa-free travel for Chinese nationals, Seoul sends a clear signal of goodwill, aiming to restore trust and cooperation.

The decision also aligns with broader regional diplomacy. South Korea will host the Asia-Pacific Economic Cooperation (APEC) leaders’ summit in Gyeongju from October 31 to November 1, which will bring together representatives from 21 member economies. The visa-free policy, coming just before China’s early October “Golden Week” holiday, is expected to maximise tourism revenue while creating a preferable diplomatic atmosphere ahead of the summit. Speculation is already building that Chinese President Xi Jinping and U.S. President Donald Trump might hold separate bilateral talks during the event—placing South Korea in a unique position as a facilitator of regional dialogue.

Beyond economics, Chinese tourism has long been a bridge for cultural exchange. Chinese visitors are drawn to South Korea’s K-pop industry, television dramas, culinary culture, and fashion trends. In return, their presence stimulates cross-cultural dialogue, business partnerships, and interpersonal connections.

However, large influxes of tourists can also generate social challenges, including overcrowding in popular destinations, strain on local infrastructure, and occasional cultural misunderstandings. The government has pledged to strengthen tourist management systems and promote responsible tourism to minimise potential frictions.

If the visa-free initiative proves successful, it could pave the way for broader bilateral cooperation, including educational exchanges, investment flows, and technology partnerships. Yet risks remain. Any escalation in U.S.–China rivalry could pressure South Korea to recalibrate its policies, potentially limiting the sustainability of the current rapprochement.

Economic headwinds—such as a slowdown in China’s domestic economy—could also impact the number of outbound travelers, even with visa-free entry. The long-term success of the policy will depend on maintaining political stability, consistent flight availability, and continued investment in tourism infrastructure.

Australian Prime Minister Anthony Albanese recently visited China, holding a high-level meeting with Chinese President Xi Jinping in Beijing. The visit underscored a significant thaw in China–Australia relations, which had cooled over the past decade due to political tensions, trade disputes, and geopolitical alignments.

China is Australia’s largest trading partner, with bilateral trade encompassing a wide array of sectors—from iron ore and coal to agricultural products, education services, and tourism. In 2024, bilateral trade reached a record $312 billion, marking a multi-year high and underscoring the resilience of economic interdependence despite diplomatic challenges.

Relations deteriorated sharply in 2020 when Australia called for an independent inquiry into the origins of COVID-19, prompting China to impose restrictions and tariffs on key Australian exports, including wine, barley, and beef. This period of tension caused significant economic losses for Australian producers and strained political trust.

Albanese’s administration has made restoring relations with China a foreign policy priority, emphasise pragmatic engagement over ideological confrontation.

During the visit, both leaders reaffirmed their commitment to mutual respect, economic cooperation, and regional stability. Several preliminary agreements were announced, including:

Clean Energy Cooperation – Joint research projects and industrial investments in solar power, hydrogen production, and carbon trading mechanisms.
Agricultural Trade – The resumption of Chinese imports of Australian wine and lobster, a move expected to revive struggling rural industries.
Education and Cultural Exchange – Expansion of university partnerships and student exchange programs, building on Australia’s reputation as a preferred destination for Chinese students.
Tourism Promotion – Initiatives to encourage more Chinese visitors to Australia through targeted marketing campaigns and streamlined visa processing.

Australia’s resource-rich economy complements China’s industrial and manufacturing base. China’s demand for high-quality raw materials—particularly iron ore—remains strong, and Australia continues to be a leading supplier. The emerging green energy sector offers a new frontier for collaboration, with both nations seeking to reduce carbon emissions and meet international climate targets.

Education is another cornerstone of bilateral ties. In 2024, over 150,000 Chinese students were enrolled in Australian universities, contributing billions to the economy and fostering long-term people-to-people connections.

The visit also reflects Australia’s delicate balancing act between its security alliance with the United States and its economic reliance on China. While Canberra remains committed to its defence agreements under the AUKUS pact with the U.S. and the UK, it has sought to avoid framing China solely as a strategic competitor.

By deepening economic engagement while maintaining security cooperation with Washington, Australia positions itself as both a reliable U.S. ally and a constructive partner for China. This dual-track diplomacy could serve as a model for other middle powers navigating the complexities of U.S.–China rivalry.

Despite recent progress, challenges remain. Political shifts in either country, changes in global market conditions, or new geopolitical tensions could disrupt the current momentum. Moreover, domestic political opposition in Australia may view closer ties with China as compromising national security interests, while Chinese policymakers may remain cautious about Australia’s role in U.S.-led security frameworks.

The developments in Seoul and Canberra highlight two different yet complementary approaches to engaging with China. South Korea’s strategy is currently focused on tourism and cultural diplomacy, leveraging people-to-people connections to build goodwill. Australia’s approach, by contrast, center on high-level economic cooperation in energy, resources, and education—sectors that have long underpinned its relationship with China.

Both nations face the challenge of balancing their economic interests with their strategic alliances with the United States. In an era of intensifying U.S.–China competition, these middle powers are experimenting with nuanced forms of engagement that avoid binary choices.

From China’s perspective, the improved relations with both South Korea and Australia enhance its regional influence, diversify its economic partnerships, and counterbalance narratives of diplomatic isolation.

The visa-free policy in South Korea and the diplomatic reset in Australia demonstrate that even amid global tensions, pragmatic cooperation is possible when mutual benefits are clear. Both cases underscore the enduring value of economic interdependence as a stabilizing force in international relations.

The coming months—shaped by major events such as the APEC summit in South Korea and ongoing trade negotiations between Australia and China—will test the resilience of these renewed partnerships. If successful, they could serve as templates for other nations seeking to navigate the turbulent waters of 21st-century geopolitics.

By Zihan Wang