Introduction to Foreign Investment in Travel Agencies
In accordance with China's commitments to the WTO in the travel agency
industry, the restrictions of foreign capital's proportion in joint ventures
will be abolished step by step.Foreign investors will be allowed to play the
role as shareholders in joint venture agencies by the end of 2003 and wholly
foreign-owned travel agencies will be permitted to set up by the end of 2005.
Travel agency is the weakest field in the travel industry in terms of opening
up.The business volume of the largest travel agencies lag far behind of those
well-known international travel agencies.
According to the China National Tourism Administration, experimental joint
venture units have been established in travel agency sector. There are 9 joint
venture travel agencies across China at present, four of which are in Beijing, 2
in Guangdong, 1 in Yunnan, Tianjin and Gansu. Experts estimate that foreign
investors will enter the travel agency sector in the forthcoming future.
First, they will establish strategic cooperation with big local travel
agencies, and then turn to establish wholly owned travel agencies to get a big
market share in the travel agency market in China.
By the end of 2002, 10 joint venture travel agencies had been approved by the
Chinese government, five of which are in Beijing, 2 in Guangdong, 1 in Yunnan,
Tianjin and Jiangsu Province. The total investment is US$8.47 million. Among
them, three investors came from Hongkong, and two came from Japan, and two came
from USA, and the last three came from Switzerland, France and Singapore. The
total revenue of these 10 joint venture travel agencies makes up 1.3 percent of
the global travel agencies.
According to the "Provisional Regulations on the Establishment of
Foreign-controlled and Wholly Foreign-owned Enterprises", foreign-controlled and
wholly foreign-owned enterprises can be set up in the national travel vocational
zones and the other five cities including Beijing, Shanghai, Guangzhou, Shenzhen
and Xian.
[Source:China National Tourism Administration]
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