Laws of the People's Republic of China

The State Administration of Tourism, the Ministry of Commerce

Decree of the State Administration of Tourism of the People's Republic of China and the Ministry of Commerce of the People's Republic of China

No.19

The Interim Provisions on the Establishment of Foreign Holding and Wholly Foreign-owned Travel Agencies are hereby promulgated upon review and adoption at the director-general work meeting of the State Administration of Tourism of the PRC on May 19, 2003 and at the second ministerial executive meeting of the Ministry of Commerce of the P.RC on June 10, 2003.

Director-General of the State Administration of Tourism He Guangwei

Minister of the Ministry of Commerce Lu Fuyuan

June 12, 2003

Interim Provision on the Establishment of Foreign Holding and Wholly Foreign-owned Travel Agencies

Article 1

In order to adapt to new situation upon China's accession to the WTO and further open tourism to the outside world and promote the development of travel agency industry, the Provision is formulated in accordance with the relevant laws and regulations of China on foreign-invested enterprises, the Regulation on Travel Agency Management and the relevant provisions.

Article 2

The Provision is applicable to the foreign holding and wholly foreign-owned travel agencies established in China during transition period prior to the scheduled term committed by China upon its accession to the WTO.

Article 3

The foreign investor for establishing a foreign holding agency shall be eligible for the following conditions:

(1)

Being a travel agency or an enterprise mainly undertaking tourism;

(2)

With total annual amount of tourism more than USD40m;

(3)

Being a member of the national (regional) association of tourism;

(4)

Being in good international credit with advanced management experience of travel agency;

(5)

Abiding by Chinese laws and the relevant Chinese regulations of tourism.

Article 4

For the foreign investor of wholly foreign-owned travel agency, besides meeting the conditions prescribed in Article 3 (1), (3), (4) and (5) of the Provision, the annual total amount of tourism prescribed in (2) should be more than USD500m.

Article 5

The Chinese investor of a foreign holding agency shall meet the conditions prescribed in Article 29 of the Regulation of Travel Agency Management.

Article 6

The foreign holding and wholly foreign-owned travel agency to be established shall meet the following conditions:

(1)

In compliance with development planning of tourism;

(2)

In compliance with the requirements of tourist market;

(3)

With investors meeting the conditions prescribed in Articles 3, 4 and 5 of the Provision; and

(4)

With registered capital no less than RMB4m.

Article 7

The eligible foreign investor can establish a foreign holding and wholly foreign-owned travel agency in the national tourist and holiday area approved by the State Council and 5 cities, including Beijing, Shanghai, Guangzhou, Shenzhen and Xi'an.

Article 8

In general, for an investor applying for establishing foreign holding and wholly foreign-owned travel agencies, only one agency will be approved.

Article 9

The Application for establishing foreign holding and wholly foreign-owned travel agencies shall be processed by reference with the procedure for examining and approving of foreign-invested travel agencies as specified in the Regulation of Travel Agency Management.

Article 10

The foreign holding and wholly foreign-owned travel agencies may not directly or in disguise engage in tourism businesses relating to going abroad of Chinese citizen or Chinese people in other regions going to Hong Kong, Macao, and Taiwan regions.

Article 11

The responsibility for interpretation of the Provision shall be vested with the State Administration of Tourism and the Ministry of Commerce.

Article 12

The Provision shall come into force 30 days after their promulgation.