How does tourism affect the demand for USD and RMB?

Summary: How Tourism Shapes the Demand for USD and RMB, and What This Means for Exchange Rates

Wondering how travel flows between China and the US actually impact the demand for their currencies, and dare I say, what this means for how much your dollar or yuan is worth on your next trip? You’re in good company—this article zeroes in on the real-life mechanics between tourism and currency demand (USD and RMB), walking step-by-step through the logic, and giving you not just the “what”, but the “how” and “why”. We’ll even look at some quirks, mistakes, and, yes, those times when the “rules” don’t quite work as you’d expect.

What Problem Does This Article Solve?

Here’s the deal: you’re planning to travel, send money, or do business between the US and China, but you’re staring at currency exchange rates wondering, “Does all this tourist traffic really affect how much my money is worth? Or is it all too small to matter?” From my own money exchanges at airports (sometimes at crazy rates), to reading real-time reports, I noticed many people get tripped up by vague explanations or misleading headlines. So this article breaks it all down—no expert jargon, just frank explanations, personal stories, official stats, and some eyebrow-raising realities from the world of cross-border currencies.

How Tourism Actually Moves Currencies Between China and the US

Forget those textbook ideas of massive trade surpluses (though they matter, too). Here’s what really happens, and yes, I’ve lost (and sometimes made) real money messing with exchange rates on the “wrong day”:

Step 1: Tourists Change Money. But How? (Screenshots & Real Steps, Not Just Theory)

Let’s say Zhang Wei, a resident of Shanghai, decides on a summer trip to New York. Excited, but then: “I need dollars!” That’s when the first friction appears. In China, you usually buy USD from big state banks (ICBC, Bank of China). Hours spent in those bank lines—the pain is real. When I was last in Beijing Capital Airport, I watched tourists buy dollars at the counter; the real demand for USD is created every time they swipe RMB for USD for shopping, souvenirs, or Five Guys in Times Square.

Now, multiply that by the hundreds of thousands of Chinese visitors to the US per year (pre-pandemic: over 2.8 million Chinese tourists to the US in 2019, spending $33 billion, according to the US Travel Association). Each one adds to aggregate demand for USD: they either pre-buy dollars in China or use their UnionPay cards in the US (the bank does the RMB->USD conversion in real time).

Reverse the scenario: American Jennifer heads from Los Angeles to Xi’an. She needs RMB. In reality, she often brings dollars but quickly realizes not every place will swap them at good rates. Cue ATM fees, midnight stress. But every transaction—ATMs, card purchases, hotel exchanges—means the system needs RMB, so her bank buys RMB on her behalf—totaling up to meaningful demand if enough people do this.

Step 2: What Happens to Currency Demand When Tourist Flows Jump or Tank?

Okay, here’s where numbers matter. When COVID hit, Chinese outbound travel plummeted by over 80% by mid-2020 (OECD). Suddenly, all those people who’d otherwise need USD weren’t buying. USD demand fell. Theoretically, lower demand could nudge the exchange rate… except global currency markets are huge.

According to BIS data, daily forex turnover in USD is over $6 trillion. The $33 billion yearly spending by Chinese tourists in the US is sizeable for tourism, but a drop in the bucket for global USD demand. So, from a “big picture” view: tourism is a small fraction of actual currency flows.

But—and here’s personal experience time—in the travel services sector (hotels, airports, e-payment systems), shifts can be felt. I remember seeing a mini-flurry before Golden Week in China: New York currency exchange counters reporting mini USD shortages, proof that local impacts can feel sharp, even if global rates barely budge.

Step 3: Does this Really Swing the Exchange Rate? Ask the Experts (And Check the Forums)

To bring a nuanced answer, I asked an old college friend who works for a Shanghai-based cross-border payments company. Paraphrased: “Tourist-driven currency demand isn’t enough to move the massive forex market unless something extraordinary happens—like a sudden government restriction or a flood of millions of new tourists overnight.” He laughed about conspiracy theories online (and shared real user debates), but said for banks dealing in travel services, volume during holiday seasons is very tangible.

Also, the World Trade Organization notes that for some small and tourist-heavy economies, flows can have outrageously high local impacts—bigger than in behemoths like China or the US.

Case Study—The Big “Oops” During a Spike in Group Tours

Back in 2018, when China lifted some group tour restrictions to the US, a huge surge happened in bookings. My own travel agent relative saw requests triple—mostly families to California. Curious, I checked the major Chinese banks’ rates during high season: there was a brief bump in local USD cash premiums at branches near big airports (shout-out to Pudong Airport’s Bank of China windows), but as for Shanghai’s interbank USD/CNY rate? Barely a blip.

Meanwhile, in online forums (like Flyertea BBS), travelers grumbled about cash shortages or wild airport rates, but not about big swings in official exchange rates. So, unless you’re changing millions at a time, your typical holiday could just face a slightly worse rate in peak season, but won’t “move the market.”

A note for trade specialists: in real B2B scenarios (think: massive travel agencies booking block accommodation or airlines paying overseas fuel bills), there is more volume, but even then, their bank conversions are typically hedged and don’t disrupt national forex rates for long.

Trade Policy Interlude—Is There a “Verified Trade” Difference?

You might wonder: does tourism-driven money flow count as “verified trade”? Here’s a quick table (from personal research and WTO/USTR docs) showing real differences:

Country	Standard Name	Legal Basis	Execution Body
United States	Customs-Verified Trade	CBP Regulations, FTAs	U.S. Customs and Border Protection
China	Cross-Border Services Monitoring	GACC, MOFCOM Regulations	GACC, MOFCOM
EU	Authorized Economic Operator (AEO)	EU Customs Code	National Customs Agencies

Source: Official government sites, WTO docs

Simulated Debate: Cross-Border Agent vs. Customs Specialist

Travel Industry Expert: “In theory, cross-border tourist spending flows look like trade, but banks treat these payments as invisible transfers, not customs-verified. If you try to claim a VAT refund on your hotel with ‘tourism export,’ customs will just laugh.”

This aligns with what I saw on the ground: shops in New York or Beijing never ask for customs declarations from tourists buying coffee or hotel nights. But for big cross-border supply chains, yes, “verified trade” and customs paperwork are every bit as real as you dread.

Expert Insights and Further Reading

Real authorities have the final word:

• WTO - Tourism and trade data: WTO Tourism
• OECD - How COVID-19 hit tourism and exchange: OECD Tourism and COVID
• BIS - Big numbers behind FX markets: BIS Triennial FX Survey
• USTR - US-China Travel and Trade Policy: USTR China Policy

Conclusion and Next Steps—What Should You Watch For?

So, does an upsurge in Chinese tourists to the US—or Americans to China—move the demand or exchange rates for USD and RMB in a way you’ll notice? In short: for you and me, maybe a slight pinch at the airport during crazy high season, but for Wall Street or Zhongguancun forex traders, it barely registers.

The biggest practical takeaway is to always check rates ahead of travel (and maybe swap cash a few days early!). For businesses, big tourist booms can inflate local demand, so prepping liquidity needs is smart. For academics or policy junkies, track the global market for signs tourism flows are becoming systemically significant—like they are for “small open economies” (WTO/OECD).

Had my share of rates panic (“wait, why did that ATM just charge me 7%?!”), but if nothing else, the interplay between tourism and currency demand makes for some great travel stories—and a little more empathy for those poor souls in the bank line. For those who love the details, always cross-check with official sites and consider subscribing to updates from the WTO, BIS, and local central banks.

If you want to really geek out (or travel smart), maybe track currency-in-circulation stats from the Federal Reserve or the People’s Bank of China. Next time you spot a queue at the airport currency booth, now you know: the effect on the grand stage is tiny—but for the people waiting, it’s very real.