A group of tourists pose at Tian'anmen Square.

"The think tank will conduct research on 23 countries and regions worldwide, all of which are major sources of inbound tourists to China," Liu says.

Twenty-six million foreign tourists visited China in 2014, and half of them were on business trips, according to him.

International language and modern methods should be applied to tell traditional Chinese cultural and historical stories and woo foreign guests, says Song Rui, director of the tourism research center at CASS.

The number of inbound tourists who took sightseeing tours stood at roughly 6.5 million from January to September in 2014, down 13.8 percent when compared with the figure during the same period in 2013, according to the China National Tourism Administration.

According to Liu, the reasons behind slowing inbound tourism to China are complex.

Many foreign businesses have moved out of China in the past two years, resulting in a reduction in the number of business travelers from abroad, he says.

"China's inbound tourism is expected to hit bottom by the end of 2015," Liu predicts. "It may start to rebound only from 2016."

Air pollution, food and travel safety are among major reasons that keep tourists from neighboring countries, such as Japan, South Korea and Singapore, from choosing China as their travel destination, he adds.

Costs are, for the most part, to blame for discouraging tourists from Europe, America and Africa.

It costs about $2,000 for these long-distance travelers to China, when they can spend less on trips to major European tourist attractions closer to home.