Foreign travel agencies will be allowed to control stakes in joint-venture companies by January 1, 2003 and wholly own companies by the end of 2005, Chinese travel authorities announced on Thursday.

The moves reflects China's hasty move to uphold agreements made when it formally joined the World Trade Organization (WTO) earlier this month.

A China National Tourism Administration (CNTA) official said the State Council -approved the revised Regulations on the Management of Travel Agency on December 11 and added a chapter on foreign travel services.

"From now, such joint-venture and wholly owned firms can apply directly for approval from the CNTA and the Ministry of Foreign Trade and Economic Co-operation (MOFTEC) to simplify the processes of examination and approval,'' said Zhang Jianzhong, director of Policy and Legal Department of the CNTA.

Still, there must be caution, he noted.

"On the other hand, we should allow foreign travel agencies enter China's tourism market step by step in accordance with their qualification,'' he added.

According to the regulations, foreign investors entering China's tourism industry must be travel services or companies engaged in tourism and be members of their country's tourism association.

In the WTO agreements, China promised that a foreign travel agency with the minimum registered capital of 2.5 million yuan (US$302,000) could control stakes in a joint-venture within three years after China's entry into the WTO.

Such minimum registered capital and ratio of stock ownership in the joint-venture can be readjusted now, but it must be approved by the CNTA and MOFTEC, Zhang said.

Zhang noted that the regulations don't touch upon foreign wholly owned travel agency because there are some problems that will require more complex legal revisions.

"China's tourism industry is the earliest one to promote and benefit from the implementation of the policy of reform and opening up to the outside world,'' said Shen Huirong, director of the Tourism Promotion Department of the CNTA.

As early as the early 1990s, the country began to allow foreign travel agencies to set up joint-ventures in China, although it did not permit them to control stakes.

By the end of last month, there has been 11 travel service of joint-ventures. These investors hail from Switzerland, Japan, France, the United States and Singapore, as well as the regions of Hong Kong and Macao, Shen said.

( China Daily December 28, 2001)