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China Lifts Foreign Ownership Restrictions On Travel Agencies

May 7, 2009

According to a story in Business Travel News, Chinese tourism and travel agency regulation authorities have lifted restrictions on foreign ownership, capital startup investment and outbound bookings, enabling foreign travel management companies to own more than 51 percent of a Chinese travel agency, as well as to open up more branches. The new rules also reduce entry capital requirements to operate at the Chinese point of sale.

According to BTN, the Chinese regulation changes are part of China’s December 2001 approved accession agreement to the World Trade Organization, which first opened up Chinese travel agencies to foreign investment in 2002 and laid out plans for today’s changes of wholly owned foreign agencies to operate on the mainland. On March 18 of this year, the China National Tourism Administration and the Legislative Affairs Office released updated travel agency regulations that lifted the threshold on annual sales volumes for the establishment of a travel agency in China, which originally were included in the WTO agreement. The minimum capital required to start a travel agency now is 300,000 yuan ($44,000), down from 2.5 million yuan ($366,535).

Chinese travel agencies now can engage in outbound travel bookings if the agency has operated for two years without infringement of the rules. Foreign-owned agencies still are prohibited from engaging in outbound booking activities except otherwise provided under the Closer Economic Partnership Arrangements-rules governing trade relations between mainland China and Hong Kong and Macao, its two Special Administrative Regions. To read the full story, click here.

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