China, California's No. 1 overseas tourist market, continues to contribute to the travel and tourism industry, the state's key economic driver, which expanded for the seventh consecutive year in 2016.

Tourism spending in 2016 injected a record $126 billion into California's economy, a 3.1 percent increase over 2015, outpacing the nation by nearly a percentage point, according to an annual economic impact report released by Visit California this month.

The tourism industry generated $10.3 billion in tax revenue and supported 1.1 million jobs in the state last year, said the report. It shows travelers in California have spent nearly $2.16 trillion, created more than 410,000 jobs and generated more than $165.3 billion in local and state tax revenues in the past 25 years.

"This report shows that tourism is a powerhouse that generates community benefits and economic value for all Californians," said Visit California President and CEO Caroline Beteta.

Spending in California by international travelers alone equals the combined value of the state's top four product exports - civilian aircraft, computer parts, non-industrial diamonds, and voice/image/data equipment. However, last year saw a declining share of international travel in California due to the strength of the US dollar and decreased visitation, said the report.

But Chinese visitors to California continued to outpace all other overseas markets with a record of 1.3 million visitors last year. They spent more than $2.9 billion on those visits - more than the spending of the UK, France and Germany combined.

The Chinese market is expected to surpass Canada as California's largest international market by the year 2020 with a projected 2 million visitors.

In San Francisco, the international volume was forecast to grow at only 0.3 percent in 2017 due to strong US dollar and adverse political climate.

The San Francisco Travel Association also bets big on the Chinese market. The largest overseas market to the city will continue to be China with 526,090 visitors projected for this year, a 9.58 percent increase over 2016.

Amy Zhao, general manager of a Bay Area travel agency MGM Holidays, said she has been busy taking calls from China. "The peak season is coming," she said. Most of her business comes from Chinese student tours.

To capitalize on the China market growth, Visit California has been heavily investing in marketing efforts. This year's China Mission took nearly 30 industry partners to four Chinese cities - Chengdu, Guangzhou and Hangzhou and Shanghai - last month.

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