Developing regional tourism in China: The potential for activating business clusters in a socialist market economy

In China, there are significant inequalities in income distribution between inland and coastal regions. Tourism is regarded as one means of fostering regional economic development and ameliorating these inequalities. Many inland destinations possess natural advantages that could form the basis for regional competitive advantage in the presence of necessary other conditions, but have experienced difficulty in drawing both domestic and international visitors away from the popular coastal gateways. This paper considers the nature of competitive advantage and the applicability of Porter's (1990. The competitive advantage of nations. London: Macmillan Press) theory in an emerging market economy. The development of regional tourism clusters based on Porter's (1998. On competition. Boston: Harvard Business Review Press) model may be a way of fostering competitive advantage in regional China. This is especially relevant with recent policy events, including the emergence of the ‘West Development’ initiative. The potential for the development of regional tourism clusters is explored in this paper, which finds that while Porter's model is theoretically applicable, there is much work to be done at a micro-business level in fostering cluster development.