Britain smoothes visa process to tap lucrative Chinese tourist trade

LONDON, June 16 Mon Jun 16, 2014 1:30pm EDT

LONDON, June 16 (Reuters) - Britain is overhauling its visa system to make it easier for Chinese tourists and businesses to visit the country, interior minister Theresa May said on Monday, marking the start of a visit by Chinese Premier Li Keqiang.

Li arrived in London on Monday for a three-day official visit which includes an audience with Queen Elizabeth and is aimed at putting aside a recent history of political tension and building closer trade and commercial ties.

Keen to tap into the spending power of tourists from China's expanding middle class and encourage businesses from the world's second-largest economy to deal with Britain, the Home Office announced a streamlined application process for Chinese visitors and a service to grant them visas within 24 hours.

"The number of Chinese people coming to Britain to visit and do business is soaring ... these changes will ensure it is easier than ever before to visit the UK," May said in a speech.

Beijing had criticised the previous application process for being overly lengthy, bureaucratic and opaque.

China is the number one luxury spender worldwide, making up 29 percent of the total global luxury spend in 2013, a December report by consultancy firm Bain & Company said.

Spending by Chinese tourists in Britain is expected to surge over the 1 billion pound mark by 2017, an increase of 84 percent from 2013 levels, a report commissioned by Barclays said in May. It highlighted increased spending by foreign holidaymakers as a source of growth for the British economy.

Following a successful pilot scheme with tour operators, all business and tourism visitors will be able to use a single form to process their visa application for Britain and for a Schengen visa, which allows access to 26 European countries.

But with concerns about immigration top of Britons' concerns heading into a 2015 general election, May reiterated that Britain had no intention of joining the Schengen scheme.

FINANCIAL CENTRE

The visa announcement was welcomed by the City of London Corporation, which represents London's financial centre. London wants to become an offshore hub for trading in China's currency.

"London cannot afford to fall behind its main rivals in the business and financial sectors such as Luxembourg, Frankfurt and Paris," the corporation's policy chairman Mark Boleat said.

China Construction Bank , China's second-largest lender, confirmed on Monday it has been selected by the Chinese government to become the clearing authority for London renminbi trading.

Within the next six months Chinese visitors will also be able to travel to the UK if they have an Irish visitor visa, and vice versa, the Home Office said.

Britain's national tourism agency, VisitBritain, said 196,000 Chinese visitors came to the country in 2013, spending an average 2,508 pounds ($4,200) each - four times the overall average spend by foreign visitors to Britain.

Research by the UK Chinese Visa Alliance, a group led by luxury and retail firms which campaigns for easier access to visas, showed difficulty obtaining visas was the reason most commonly cited by tour operators for not organising more tours to Britain.

($1 = 0.5956 British Pounds) (Editing by Catherine Evans)