China Travel Forum

[Aynur]

BEIJING, China has further opened up its tourism market to foreign investors. The amendments to the Provisional Regulations on the Establishment of Foreign-controlled and Wholly Foreign-owned Travel Agencies were jointly announced by the China National Tourism Administration (CNTA) and the Ministry of Commerce in February.

Under the amended provisions, the required registered capital of a foreign-owned or controlled travel agency has been reduced from 4 million yuan (US$483,000) to 2.5 million yuan (US$300,000). However, the provisions still demand that an investor applying to fund a travel agency in China show annual business income of no less than US$40 million.

Another amendment to the regulations is the abolition of the city limitation term that allowed foreign-owned or foreign-controlled travel agencies to operate only in Beijing, Shanghai, Guangzhou, Shenzhen and Xi’an.

To date and under the old provisions, the CNTA approved the establishment of five fully foreign-funded, and five overseas-controlled agencies.

The Provisional Regulations on the Establishment of Foreign-controlled and Wholly Foreign-owned Travel Agencies were released on June 12, 2003 jointly by CNTA and the Ministry of Commerce. Under the provisions, foreign-controlled or wholly foreign-owned travel agencies are not permitted to arrange outbound tours for Chinese mainland citizens, including tours to Hong Kong and Macao special administrative regions or Taiwan Province.

Their business is restricted to inbound tours for non-Chinese citizens and domestic tours.

Under the conditions stipulated for China’s entry to the WTO, the Chinese government had committed to abolishing business boundary limitations by 2007.