State stalls joint-venture travel groups

FAILURE of the Chinese government to devise a legal framework for joint-venture travel companies has delayed Tianjin's application to establish the debut operation, says a Tianjin official.

Although the China National Tourism Administration (CNTA) raised the possibility of setting up joint-venture travel agencies as early as 1992, it has yet to complete a draft set of rules and regulations to govern their operations.

'Nothing about joint-venture travel companies has yet been settled. Everyone from high-ranking officials to people in local offices are still thinking things over,' according to He Huanzhen, Tianjin Tourism Bureau's international marketing director, in Hong Kong yesterday.

This year, the CNTA has extended the right to create joint-venture travel companies to key cities, allowing a total of 23 such companies to be established nationally.

But Mr He and officials from other cities had different conceptions of the exact business scope of the joint-ventures and the size of the foreign stake.

Mr He said Tianjin's joint venture would engage exclusively in marketing and providing local services for tourists.

Shanghai Municipal Tourism Administration deputy director Mei Jun said the main focus of a joint-venture travel service would be attracting foreign tourists to Shanghai, but he would not exclude the possibility of enlarging the city's overseas travel services.

He said Shanghai probably would have the power to organise its own oveseas travel groups by the end of this year. For now, the city must work through the head office of China International Travel Service (CITS) in Beijing.

Mr Mei also said the joint ventures would have the power to develop travel-related services, such as hotels and tour buses. His city has yet to find a suitable partner after negotiating with more than 10 overseas travel agencies.

Kang Yongli, deputy director of the Beijing Tourism Administration planning department, said she thought a joint-venture travel company would have the right to organise domestic travel to any destination in China, no matter where the company was based.

'The tourist industry isn't like other industries. You can't give someone the right to establish a travel company and then restrict the scope of their operations,' she said at the Hong Kong International Travel Exposition.

But Mr Mei said the government would retain at least 51 per cent, and control, of the joint ventures.

He said the Shanghai branch of CITS was considering allowing foreign participation through a company with a B-share listing instead of through a joint venture.

That way foreigners could buy shares in the company and CITS could avoid choosing a single partner, a move which might alienate other clients.

'China's big travel companies have lots and lots of friends. They are having a hard time choosing joint-venture partners because the relationships are so complicated,' he said.

Shanghai's quota of two joint-venture travel companies might be filled by smaller firms. Up to six firms already have partners and are about to apply for approval, according to Mr Mei.

Tianjin, which filed its application this spring, would not disclose the name of its Western partner.

Mr Mei predicted that once Tianjin's application was approved, other travel companies in China would rush to follow.