China National Travel Service Group, the country’s largest tourism conglomerate, plans to launch a 50 billion yuan investment fund for travel businesses, part of efforts to diversify into the finance sector amid fierce competition brought on by booming online travel agencies. It will be the latest state-level juggernaut to tap financial services to reinforce China’s go-global strategy, targeting aggressive acquisitions around the world. “The proposal has been submitted to the State Council for approval, and the first phase of fundraising is targeted at 10 billion yuan,” Zhang Fengchun, the group’s chief financial officer, told the South China Morning Post on Thursday. Zhang also said the investment fund would be used to help China effectively consolidate the fast-growing tourism industry. It will also be the country’s largest investment fund focusing on the tourism sector. State-owned China National Travel Service came into existence earlier this year after Beijing merged China National Travel Service (HK) Group Corp with China International Travel Service Group in a multibillion-yuan deal. The newly created tourism giant has assets of 150 billion yuan and more than 50,000 employees. Aside from travel agency businesses, the group also engages in operations of scenic spots, hotels and logistics. Zhang said the creation of the investment fund resulted from the central government’s call to build a tourism industry chain on par with international standards. The rising affluence of mainland Chinese in the past decade has ushered in huge demand for world-class travel services. Last year, China’s tourism sector saw investment of more than 1 trillion yuan, 57 per cent of which was derived from privately owned businesses. “State-owned travel companies face challenges from private businesses which appear to be more aggressive and ambitious,” said Li Wenjie, the chief executive of Shanghai Yaheng International Travel. “But they still have huge resources in their hands which can be used to support their expansion.” The sizzling growth of online travel service firms, which became the primary choice for millions of mainland Chinese tourists, also ratcheted up pressure on the state-owned giants to overhaul their businesses and fine-tune services. Jiang Yan, the president of China National Travel Service, said the company would be a leader in consolidating the industry and developing innovative new products. The tourism conglomerate is an outgrowth of the reforms targeting state-owned companies. Its birth came about after the state asset watchdog designated a batch of industrial giants to undergo restructuring in a pilot programme. Last year, 117 million Chinese tourists travelled abroad, up 9 per cent from 2014. China National Travel Service was expected to report a net profit of 6 billion yuan on revenue of more than 100 billion yuan, Zhang said. The revenue would be at least 20 billion yuan more than the combined figure for last year.