The Development and Economic Impact of Tourism in China

This paper investigates the relationship between the development of tourism and economy growth. Both two time series are non-stationary, meaning there are unit root in both series and their 1st difference series are stationary. From 1994 to 2007, there is stable relationship between these two series and the number of inbound visitors is the granger reason of the change of foreign exchange income on tourism. So we can get the idea that if we wish to improve the foreign income from tourism, the only way is to attract more inbound tourists.