China is to allow foreign travel firms to establish solely owned agencies
from next month in a move to meet WTO commitments.
Foreign firms will also be allowed to take controlling stakes in joint
ventures, according to the country's tourism regulator.
Foreigners will be able to operate in five major cities - Beijing, Shanghai,
Guangzhou, Shenzhen and Xian - and at government designated resort areas,
the National Tourism Administration said on its website.
The new provisions would come into effect in 30 days, the regulator said
in a circular dated June 12.
The government promised to prise open its lucrative tourism market to
foreign players under the terms of its entry into the World Trade Organisation
(WTO) in December 2001.
It has said it will allow foreign partners in joint ventures to hold
majority stakes by this year and allow fully foreign-funded companies
China has already approved at least a dozen Sino-foreign joint venture
Foreign-controlled companies would be barred from organising tours of
Chinese citizens travelling overseas or to Hong Kong, Macau and Taiwan,
the circular said.
Only foreign companies with annual revenues of US$500 million (S$865
million) or more would be allowed solely owned agencies and those seeking
a controlling stake in a joint venture would have to have revenue of at
least US$40 million, it said.
Foreign firms normally would be limited to establishing one venture with
registered capital of no less than four million yuan (S$837,000).
Meanwhile, the European Union's top trade official, Mr Pascal Lamy, arrived
in Beijing on Friday for a two-day visit.
He said China was falling behind in some of its commitments to the WTO
and needed to clarify opaque laws and practices that violate those agreements.
'We need to reduce the gap between law and practice,' he told reporters
on Friday following a day of meetings with Chinese officials.
Rules for foreigners buying Chinese companies, for instance, needed clarification.
But he noted China was meeting timetables for lowering tariffs on imports,
creating 'a tangible benefit in terms of market access'.