Does Rural Tourism Policy Unlock Economic Growth in China’s Rural Areas? A Synthetic Control Approach

Rural tourism has become a key instrument for promoting economic development in rural areas. In response, the central government of China launched the National Rural Tourism Key Villages (LRTV) policy in 2019, designating 320 villages with high tourism potential to receive financial support, talent training, and destination planning to boost rural revitalization. This study employs the synthetic control method from 2005 to 2021 to assess the policy’s economic effects. Results show that treated villages experienced, on average, a 12.45% increase in local GDP relative to their synthetic counterparts. This result suggests that state-led tourism policies can promote economic growth in rural areas with weak tourism market mechanisms. The policy’s effectiveness also varies by economic conditions, population density, and tourism type. This study fills a gap by providing evidence on rural tourism effectiveness in China with implications for other developing economies.