China Lifts Restrictions on Foreign Travel Agencies

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The China National Tourism Administration has announced a further loosening of restrictions on foreign-funded travel agencies. An official with the administration says the new policy - which starts in July - will make it easier for foreign agencies to enter the Chinese market. Ning Yan has the story:

Reporter:
Man Hongwei, head of the Administration's Department of Quality Control and Management, says now is the time to put the policy in place.

"On July 1st, we will fulfill two promises we made when we entered the World Trade Organization, that's half a year ahead of schedule. First, the amount of capital required to register foreign travel agencies will be the same as local agencies across the country. Second, foreign-funded travel agencies will be allowed to set up their branches in all provinces."

Man Hongwei says foreign-funded travel agencies must currently have a minimum of 2.5 million yuan, or about 300 thousand US dollars, in capital to set up an office in the country. But this will be remarkably reduced by 40% to 1.5 million yuan.

The official says China's tourism industry has met most of the commitments made when China joined the WTO five years ago. He says the world's top 10 hotel chains have already expanded their business to China. And there are now no barriers for foreign-funded hospitality groups seeking to enter the Chinese market.

Man Hongwei adds that there are now 25 foreign and joint-venture travel agencies in China, including the world's largest, American Express, and Europe's largest, TUI.

He says he believes the new policy will attract more international hospitality groups to China and help boost the country’s tourism industry.
Vice-president of American Express, Gregor Lochtie, welcomes the relaxation of restrictions on foreign-funded travel agencies.

"I think the changes are positive. From the business travel and corporate travel management, which American Express operates, most of the major agencies in the world already have operations in China. They may be another segment of the travel industry, new foreign players that enter the Chinese market."

In 2006, the total number of tourists traveling to and from China hit 80 million, bringing revenue of 600 billion yuan, or about 75 billion US dollars, to the country's tourism industry.

China is now the world's fourth most popular tourist destination and Asia's largest source of tourists. The World Tourism Organization predicts that the country has the potential to become the world's second most popular tourist destination. It says the 2008 Beijing Olympics will be an especially big boost to the Chinese tourism market.

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