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Tourism Watchdog Receives 10 Applications from Foreign Investors
A recent move to open up China's lucrative tourism industry to overseas firms is being keenly eyed by 10 major players.

In an exclusive interview with China Daily, an official from China National Tourism Administration (CNTA) revealed that they had received 10 applications from foreign investors.

"Everything is going quite well and these overseas investors are showing interest in the industry, although the procedure is in the preparation stages," said Du Yili, director of the Quality Standard and Management Department of the CNTA.

Du refused to elaborate about the would-be investors as disclosure might compromise commercial secrets. But sources with some Beijing-based travel agencies said that the overseas investors included JTB (Japan Travel Bureau), one of the biggest travel agencies in Japan, and Carlson Wagonlit, a global leader in travel and expense management.

According to a provisional rule issued by the CNTA and the Ministry of Commerce on June 14, the first wholly overseas-owned travel agency would be given approval within 30 days of the regulation's issue.

She said the impact of wholly overseas-owned travel agencies on domestic firms would not be too adverse. Not least because the tourism industry has been a pioneer in attracting overseas investment since the country adopted the policy of reform and opening up in 1979.

"Establishment of wholly overseas-owned travel agencies will help improve management and services of domestic tourism," said Zhang Jianhua, chairman of the board of CITS American Express Travel Service Ltd.

Zhang's company is a Beijing-based joint venture of American Express and China International Travel Service, China's leading travel agency.

There are 14 such joint-venture travel agencies in China, all of which are shareholding firms controlled by China.

"There is a long way to go to realize the overseas investors target, though the new rule is a sign we are not only carrying out our country's promise to the World Trade Organization but two-and-a-half years ahead of schedule," said Zhang Guangrui, professor and director of the Tourism Research Center of the Chinese Academy of Social Sciences.

One complaint leveled by overseas investors is that even under the terms of the new regulation their firms will be prohibited from arranging outbound tours for Chinese mainland citizens to other countries and regions.

And the threshold for entry into China's market is set high, as the necessary registered capital for a wholly foreign-owned travel service is at least 4 million yuan (US$483,000), and the annual business revenue should be no less than 40 million.

(China Daily July 1, 2003)

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