A travel agency in Seoul promotes visa applications for China entry, Nov. 3. Korea is newly included in China's visa waiver list, effective from Nov. 8 to Dec. 31, 2025. Yonhap

Korea faces troubles ahead in curbing a deficit in travel balance, following China's unprecedented visa-free policy aimed at welcoming South Korean tourists.

Effective from Nov. 8, South Korean nationals are allowed to enter China for tourism, business, family visits or transit for up to 15 days without a visa.

The policy will be run through Dec. 31, 2025.

The visa waiver program comes after Korea posted its largest tourism deficit in six years in the first half of 2024.

The data compiled by the Bank of Korea (BOK) and the Korea Tourism Organization (KTO) showed that Korea logged a deficit of $6.48 billion in the travel balance from January to June.

The $6.48 billion marked the highest deficit for any first half of a year since 2018 when it totaled $7.83 billion.

In the first six months of 2024, 14.02 million Koreans traveled abroad, while 7.7 million foreign nationals visited here.

Korean travelers spent $14.3 billion on overseas travel, far outpacing the $7.84 billion spent by foreign visitors.

The departure hall at Incheon International Airport Terminal 1 is crowded with travelers, Sept. 27. Yonhap

"It is likely that the tourism deficit will get worse, as Beijing's policy appears to be aimed at gaining favor from Korean tourists by fully capitalizing on the close travel distance between the two countries," a staffer at Korea Tourism Association said on condition of anonymity.

The staffer pointed out that Korea is the only Asian country among the nine countries that were added to China's expanded visa-free list.

The nine also include Andorra, Denmark, Finland, Iceland, Liechtenstein, Monaco, Norway and Slovakia.

The staffer also pointed out that this is the first time that Korean citizens will be visa-exempt from entering China since the establishment of bilateral diplomatic relations in 1992.

Also on condition of anonymity, a professor at Kyung Hee University's College of Hotel & Tourism Management said it is "too early at the moment" to assume how China's visa rule will affect Korea's travel balance.

The professor noted that the Chinese foreign ministry announced the expanded visa program abruptly on Nov. 1, without consulting the Seoul side.

"It will take a couple of months to discern the relations between this program and Korea's travel deficit," he said.

Nevertheless, he viewed that Beijing's policy will "certainly widen Korean citizens' options in overseas tourist destinations."

"China did not draw much attention from Korean travelers in the post-pandemic era, and things are expected to change," the professor added.

He attributed the tourism deficit in the first six months of this year largely to a surge in the number of Korean travelers to Japan.

A record 17.78 million international travelers went to Japan during the cited period as the Japanese yen weakened against other currencies, including the Korean won.

And Koreans took up the largest share of these visitors with 4.44 million individuals, meaning one out of four international arrivals to Japan was from Korea.

Correspondingly, data from Hana Card, a Seoul-based card issuer, showed that spending made in Japan using the firm's credit or check cards more than doubled from the previous year and amounted to 431.4 billion won ($312.81 million) in the first half of 2024.

Tourists visit the Forbidden City in Beijing, Oct. 7. AP-Yonhap

Shin Yul, a political science professor at Myongji University, said, "China's visa policy is carefully orchestrated for diplomatic and economic purposes and it is anticipated to make full-fledged efforts to woo Korean tourists."

Seoul is leaned toward Washington amid the U.S.-China decoupling, whereas Beijing's influence over Pyongyang is put to test over the Kim Jong-un regime's joining of Russia's invasion of Ukraine.

According to Morgan Stanley, China is expected to expand its share of international tourists from 2.4 percent in 2019 to 6 percent by 2033, with inbound tourism contributing as much as 4 percent to gross domestic product (GDP) over the next decade from just under 1 percent

The multinational investment bank deemed that tourism thus could boost China on its path to economic recovery as the government pushes to spur more consumption, restructure property-market debt and spark productivity in the public and private sectors.

For instance, revenue coming from international travelers could go up from $77 billion in 2019 to $431 billion in 2033.

Plus, the influx of foreign tourists could add up to 35 million jobs in the sector over the next decade.

That figure is equivalent to 5 percent of the current total employment, and can improve productivity and consumption, Morgan Stanley explained.

Meanwhile, travel, aviation and hospitality stocks have been gaining ground following China's announcement of the visa-free policy.

Multiple travel companies are working on new tour packages by varying targeted age groups, while airlines are increasing their number of flights.