Bureaucracy and Perception: The Fight for the Red Envelope

For the last several months we have seen a series of push and pull factors, predominantly by Britain, in trying to secure a greater share of the Chinese travel market...

For the last several months we have seen a series of push and pull factors, predominantly by Britain, in trying to secure a greater share of the Chinese travel market. However, on the 13 January 2014, France fought back and Mr Fabius, the French Foreign Minister, announced a new visa regime, effective 27 January, under which travel requests from Chinese visitors will be processed within 48 hours. The scheme was announced as part of celebrations marking the 50th anniversary of Paris establishing full diplomatic ties with communist China.

But why is China so important?

China now has over 1 million Chinese millionaires plus an additional 600,000 high net worth individuals (worth upwards of USD$15 million). While statistics may vary slightly depending upon the source, what is clear is that Chinese visitors like to travel and there has been a sharp increase in the number of Chinese visitors coming to Britain and Europe over the last 10 years. The Global Blue Shopper Report 2013 estimates that the average Chinese tourist spends £1,688 per trip, which for 2011 resulted in a total value of £240 million.

The issue?

Chinese visitors coming to Britain count for just 7% of the total number of Chinese visitors to Europe. An increase in this market share would mean greater spend in the UK with the added benefit of significant job creation. Organisations such as the UK Chinese Visa Alliance estimate that Britain misses out on around £1.2 billion of spending by Chinese tourists because it underperforms in attracting them.

Various lobbying bodies argue the problem is with the UK visa system. The Schengen visa system offers a more simplified approach and provides Chinese visitors with access to 26 European countries while the UK visa only grants access to the UK and Ireland.

On the back of the recent French announcement London tourism bosses have demanded the immediate scrapping of all colonial bureaucracy putting off big-spending Chinese visitors. But is it really the visa system that is halting Chinese visitors from coming to the UK? Whilst the French announcement is suggesting a turnaround of visas available in 48 hours the announcement has not been coupled with key procedures to support it. Karl Waheed, principal of Karl Waheed Advocates and French immigration specialist, stated: "Mr Fabius did not go into detail as to who would qualify for such fast track processing and it is not imaginable that any Chinese tourist visa applicants would qualify."

Mr Waheed also commented: "I tend to think that the 48 hour visa operation announced by Mr. Fabius is an urge to the consular authorities to process applications coming in from TLS [a private visa processing entity] within 48 hours, rather than 2 weeks. The overall processing time (including TLS processing) which is currently 10 to 15 days, may not change significantly. Mr. Fabius may also be thinking of a fast track process for specific applicants, such as those who have been invited to official cultural events and ceremonies over 2014 (the "Chinese year") in France. I do not think that in either case France is offering a big new advantage to Chinese tourists to motivate them to begin their European excursion in France."

Has this announcement by France therefore simply been a tactical ploy to provide a positive perception to Chinese tourists?

In the last 5 months Britain has done more than just provide a positive perception. It has actively thought outside the box and made numerous liberal changes to the existing visa system and put in place trial arrangements to help smooth the process of visa applications for Chinese nationals.

Would the UK joining the Schengen not be the best solution?

This is unrealistic and the UK opted out of joining the Schengen area predominantly because of its Island status and the need for it to continue to operate border controls at the port of entry rather than the internal controls (such as identity cards checks) that are common within the Schengen area. Furthermore, a referendum would be required under Section 6 of the European Union Act 2011 before the UK could join the Schengen area.

The Home Office has been listening to the calls for liberalisation of the visa system and appears to be doing all that it can to ensure that Chinese nationals are provided with seamless visa options. These initiatives include: a reduction in processing times, extended opening times, an introduction of a 24 hour super priority visa service for business leaders and the introduction of a pilot scheme to allow Chinese tourists to apply for a UK visa using the simplified Schengen form through certain approved tour operators. It is estimated that tour operators account for 80% of Chinese tourists to Europe. There is, however, research which evidences a growing number of Chinese nationals who now prefer to book independently rather than through tourist groups. If successful, the call would be for the Home Office to roll out the simplified Schengen form process across the board.

In addition, there has been talk by the Home Office of sharing office space in its visa application centres in China with other Schengen countries so as to provide a seamless single application process. This however should only be a stopgap until such time as the Home Office is able to introduce a similar system to the Electronic Visa Waiver (EVW) program that was introduced to passport holders of Oman, Qatar and the United Arab Emirates on 21 January 2014. This scheme effectively is open to those individuals coming to the UK for tourism and business. It is free of charge and can be accessed by the traveler registering online and completing the electronic form at least 48 hours before departure with travel details.

Adopting the EVW would be the single and best solution to this problem. It is only then that we will be able to really tell if the UK's ability to attract Chinese money has been a visa issue all along. Nevertheless, some cynics may say that the romance of France, access to 26 countries and a better climate will always have a stronger pull factor over historic London and the popular Bicester Village shopping outlet.

Katrina Cooper is a Counsel and Head of UK Immigration at Faegre Baker Daniels, an international law firm. She can be reached at katrina.cooper@FaegreBD.com.


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