Market Access Report: Travel and Tourism

Jones, Day, Reavis & Pogue  

Despite the adverse effect of the September 11 tragedy on worldwide travel, China saw a hefty Rmb50 billion in tourism revenue in 2001.  More than 800 million people traveled within China in 2001, and 89 million foreign tourists visited China.  Traveling for leisure has historically been a luxury inaccessible to all but a select few in China, but the Spring Festival of 2002 alone generated a total of Rmb22.8 billion (US$2.9 billion) in tourism revenue.  In addition, mainland citizens have become the worldfs fastest-growing group of international travelers.  They have, for example, already become the largest group of travelers to Thailand and, according to the World Travel Organization, by 2020 China will likely become the leading destination country for international travelers with over 130 million foreign tourists visiting China, while over 100 million Chinese are predicted to travel abroad.

Such rapid growth in tourism has been accompanied by a mushrooming of travel-related businesses.  Although tourism has been one of the slower areas to open up to foreign investment in China, the Chinese government first allowed foreign investment in the form of representative offices and majority Chinese-owned equity joint ventures (JVs) on a trial basis in the late 1990s.  Upon Chinafs accession to the World Trade Organization (WTO), China amended its regulations on travel agencies to, among other things, formalize its WTO commitment to open up this sector to foreign investment.