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| Capital Restrictions Eased on Foreign Travel Agencies |
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The Chinese government is to ease the registered capital requirement on foreign-funded travel agencies from July 1, according to the National Tourism Administration (NTA). This will be four months ahead of the Nov. 11 deadline set by the World Trade Organization (WTO) for China's accession. China had fulfilled some WTO commitments regarding the tourism sector ahead of schedule or on time, and would fulfill other commitments ahead of schedule, said Shao Qiwei, director of NTA on Thursday. Under the interim provisions on the establishment of foreign-investor controlled and solely foreign-funded travel agencies issued by NTA and the Ministry of Commerce in 2003, their registered capital is to be cut from a minimum of four million yuan (US$514,370) to 2.5 million yuan (US$321,481). The registered capital for a Chinese international travel agency is a minimum 1.5 million yuan (US$192,889) and for a Chinese domestic travel agency 300,000 yuan (US$38,000). China allowed foreign investors to hold majority stakes in joint venture agencies before Jan. 1, 2003, and gave go-ahead to establish solely foreign-funded travel agencies before Dec. 31, 2005. Shao said China would cancel restrictions on foreign travel agencies that planned to open subsidiaries, but did not elaborate. The announcement caused concern among Chinese travel agencies. Wang Jian, a spokesman for the China Travel Service Guangdong Branch, said more foreign travel agencies were expected to come into China, posing a huge challenge for domestic firms. Wang feared that foreign travel agencies would merge with or take over more domestic agencies. "A large influx of foreign travel agencies will not occur in a short time, as they have to research market potential," said Su Guangjian, head of market management of the Shanghai Municipal Tourism Commission. Shao also disclosed that China would encourage strongly competitive domestic travel agencies to expand abroad. Shao said China needed to open its tourism sector wider so as to improve the industry's competitiveness on the international market. China had approved 25 foreign-controlled and solely foreign-funded travel agencies by the end of last year. The country hosted 22 million foreign tourists last year, up 8.5 percent year-on-year. (Xinhua News Agency January 20, 2007) |
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