BIZCHINA / Transportation
Foreign Investment
Updated: 2006-04-21 14:23
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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