Laws of the People's Republic of China

    Article 1  These Procedures are formulated in accordance with the the Law
of the People's Republic of China Concerning Chinese-Foreign Joint Ventures
and the Regulations on Traval Services Administration as well as relevant laws
and regulations with a view to further extending the opening up of the toruism
industry to the outside world and promoting the development of the tourism
industry.

    Article 2  These Procedures shall be applicable to travel services
established with Chinese and foreign investments by foreign companies or
enterprises and Chinese companies or enterprises within the territory of China(hereinafter referred to as travel services with joint investments
for abbreviation).

    Article 3  For application for the establishment of a travel service
with joint investments, the Chinese joint venturer should meet the
following criteria:

    (1)It shall be an international travel service;

    (2)Its average annual number of overseas tourists?? in 3 years prior
to the application exceeds 30000 man/day;

    (3)Total sales volume of average annual tourism business in 3 years
prior to the application exceeds RMB 50 million Yuan; and

    (4)It must be an official member of China Tourism Association.

    Article 4  For application for the establishment of a travel service
with joint investments, the foreign joint venturer should meet the
following criteria:

    (1)It shall be a travel service operating international tourism or an
enterprise of a travel service operating international tourism with all
capital;

    (2)It has an annual sales volume from tourism business of more than
US$ 50 million;

    (3)It has joined international or national computer network for
advance booking or has formed its own computer network for advance booking;
and

    (4)It must be an official member of its national tourism association.

    Article 5  The travel service with joint investments to be established
should meet the following criteria:

    (1)It has a registered capital of not less than RMB 5 million Yuan;

    (2)Its enterprise form shall be a limited liability company;

    (3)The percentage of contribution of the registered capital from the
Chinese party shall not be under 51%;

    (4)Its legal representative shall be appointed by the Chinese party;

    (5)It has a business site, business facilities and management staff
that meet the requirements; and

    (6)The duration of joint venture shall not exceed 20 years.

    Article 6  A travel service with joint investments shall, pursuant to
the provisions of management of entry tourism by international travel
services, effect payment of quality guaranty fund.

    Article 7  Procedures for the examination and approval of a travel
service with joint investments shall be as follows:

    (1)The Chinese joint venturer shall submit such documents as the
project proposal and feasibility study for the travel service with joint
investments to the department of tourism administration of the province
(autonomous region, municipality directly under the Central Government)
or municipality under direct planning by the state of the locality wherein
the travel service is to be located. Those documents shall, upon preliminary
examination of the department of tourism administration at the provincial
level, be submitted to the State Tourism Administration.

    Where the Chinese joint venturer is an enterprise under central
management, those documents shall, upon preliminary examination of its
competment department, be submitted to the State Tourism Administration.

    The State Tourism Administration shall, pursuant to the laws and
regulations of the state concerning tourism administration process the
examination and approval of the documents submitted.

    (2)The Chinese joint venturer shall, upon receipt of the official
reply of approval of the State Tourism Administration, submit such
documents as the contract on the establishment of a travel service
with joint investments and its articles of association to the provincial-
level competent department of foreign economic relations and trade of the locality. The procincial-level competent department of foreign economic
relations and trade shall, upon preliminary examination, submit those
documents to the Ministry of Foreign Economic Relations and Trade.

    Where the Chinese joint venturer is an enterprise under central
management, those documents shall, upon preliminary examination of its
competent department, be submitted to the Ministry of Foreign Economic
Relations and Trade.

    The Ministry of Foreign Economic Relations and Trade shall, pursuant to
the laws and regulations of the state concerning foreign business investment,
process the examination and approval of the documents submitted.

    (3)The Chinese joint venturer shall, on the strength of the certificate
of approval of enterprise with foreign business investment issued by the
Ministry of Foreign Economic Relations and Trade and the business permit
for travel service operations issued by the State Tourism Administration
and pursuant to the provisions, go through the formalities of registration
and taxation registration for the project the establishment of which has
been approved.

    Article 8  The following documents should be presented for the application
for the establishment of a travel service with joint investments:

    (1)certification of qualifications of the Chinese joint venturer
including a copy of the business licence, business permit for travel service
operations, annual business reports of the 3 years prior to the application
and certification of the membership of the tourism association;

    (2)certification of qualifications of the foreign joint venturer
including a copy of the registration, certificate of bank credit standing,
certification of financial status issued by an accountant firm, certificate
of access to the net provided by the computy company concerned, certification
of the membership of national tourism association and the annual report of
the year prior to the application;

    (3)the project proposal of the travel service with joint investments;

    (4)the feasibility study of the travel service with joint investments;

    (5)the contract and articles of association of the travel service with
joint investments; and

    (6)other materials the presentation of which is required under laws
and regulations and by the examination and approval organs.

    Article 9  Each foreign joint venturer shall only invest in the
establishment of one travel service with joint investments within the
territory of China.

    Article 10  No permission shall be granted temporarily during the
experimental phase for the establishemnt of branch(es) of travel services
with joint investments.

    Article 11  Travel services with joint investments may operate entry
tourism business and domestic tourism business.

    Article 12  No permission shall be granted temporarily to travel
services with joint investments for management of the business of Chinese citizens going to foreign countries and the Hongkong Special
Administrative Region and the regions of Macao and Taiwan for tourism.

    Article 13  Management by travel services with joint investments of special tourism projects and projects of tourism in special areas must
be submitted to the State Tourism Administration and deparmtnets concerned
for examination and approval.

    Artilce 14  Travel services with joint investments shall not organzie
and arrange projects containing contents of obscenity, gambling and
drug taking and other items harmful to social ethics and people's physical
and mental health; shall not organize projects containing contents damaging
state interests and national dignity of the People's Republic of China; and
shall not organize projects containing contents prohibited under Chinese
laws and regulations.

    Article 15  Employment of tour guides by travel services with joint
investments within the territory of China shall be processed pursuant to
relevant state provisions.

    Article 16  Travel services with joint investments shall be subject to
trade administration of the department of tourism administration.

    Article 17  Travel services with joint investments shall, pursuant to
provisions, submit financial, accounting and statistical statements to
the department of tourism administration and other departments concerned
and be subject to business inspection.

    Article 18  The foreign exchange revenue and expenditure of travel
services with joint investments shall be handled pursuant to the relevant
procedures for enterprises with foreign business investment.

    Article 19  Travel services with joint investments shall abide by the
laws and regulations of the People's Republic of China, be subject to
the jurisdiction of laws and regualtions of China, and their just management
activities and legitimate rights and interests shall be protected by the
laws and regulations of China.

    In the event of acts on the part of travel services with joint investments
in violation of the laws and regulations of China, they shall be handled
pursuant to the relevant laws and regulations.

    Article 20  Whoever violates the provisions of these Procedures
shall be imposed penalty by the department of tourism administration
pursuant to the Regulations on Travel Services Administration and
the Rules for the Implementation of the Regulations on Travel Services
Administration.

    Article 21  Interim Measures for the Administration of Examination and
Approval of Establishment of Category I Travel Services with Chinese and
foreign investments in National Tourism Holiday Areas shall continue to be
effective during the implementation of these Procedures.

    Article 22  For establishment of travel services with joint investments
with joint investments by investors of the Hongkong Special Administrative
Region and regions of Macao and Taiwan and the domestic investors, reference
shall be made to these Procedures.

    Article 23  The State Tourism Administration and the Ministry of Foreign
Economic Relations and Trade shall be responsible for the interpretation of these Procedures.

    Article 24  These Procedures shall go into force as of the date of promulgation.