First Anniversary of Entry to WTO: Foreign Investors Eye Tourism Sector

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 ◆ First Anniversary of Entry to WTO: Foreign Investors Eye Tourism Sector

China's tourism sector has made progress in lowering the market threshold for foreign investors to set up joint ventures or run travel services. China currently has about 10 joint-venture tourist agencies with major foreign companies, including German-based TUI (Touristik Union International), United States-based Rosenbluth and American Express. In line with China's agreement with the WTO, foreign investors will be permitted to hold shares in tourist agencies operating in China by the end of 2003 and to set up solely owned agencies by 2005. Last month, TUI signed a memorandum of cooperation with China Travel Service Corporation (CTS), one the three largest travel agencies in China, to set up a joint-venture travel agency with TUI's controlling shares. "It is the first kind of such travel service in China, which can help CTS to improve its management and service for attracting more European tourists," said Liu Jiaxiang, the general manager of CTS. Before China's entry into the WTO, it was very difficult to set up a joint-venture travel agency in the country, as most China's travel services seemed less confident to make a breakthrough. Since China joined the WTO, many travel agencies have regained confidence after the expected "earthquake" in the industry failed to occur, said Zhang Guangrui, professor of Tourism Research Centre of Chinese Academy of Social Sciences. The 10 joint ventures may represent a step forward in the tourism industry, but this does not fully realize the government's policy objectives, Zhang said. But their main businesses only cover the commercial traveling consultation or management instead of organizing or receiving tour groups.