Apart from Jalpak International, U.S. business travel giant American Express established a joint venture with the China International Travel Service in 2003, and the German giant CAISSA Touristic (Group) AG invested 30 million yuan in CAISSA (China) Investment Co. Ltd. in 2006 to provide travel agency, airline and e-commerce services. Currently, there are 10 joint ventures or foreign-funded travel agencies in China.

Despite this, restrictions are still in place requiring a certain minimum amount of registered capital for travel agencies intending to establish branches in China. The good news, according to Shao, is that China will lift these restrictions on July 1 this year. By the time, foreign travel agencies will be allowed to establish branch offices in any Chinese city after passing through a licensing process and will be granted the same status as any domestic travel agency.

Some domestic travel agencies have embraced the news. Chen Rong, Vice President of the CITS Group Corp., believes the lifting of restrictions will provide opportunities for domestic companies to cooperate with foreign investors.

"With consideration to the advantages of local travel agencies, foreign investors will prefer joint ventures to wholly owned companies, hoping to make the most out of respective strengths and participate in the management of major travel agencies in China," said Chen.

In the long run, Chen believes that opening the market to foreign investment is conducive to the development of the domestic travel market and will help speed up the division of labor within the industry.

Yet, some worry about the competition.

"If foreign investors acquire major travel agencies, it will have a great impact on the rest of domestic companies," said Zhan Lei, spokesman for Spring International Travel Service. Spring International Travel attempted to partner with Rosenbluth in the 1990s on the founding of branches in China, but failed to see any fruitful results from the venture because of " idea clashes," according to Zhan.

Room for improvement

Despite the rosy prospects, there are problems within the travel sector. Weak infrastructure and a slow pace of development of public facilities have failed to keep up with the growing demands for transportation and accommodation within the travel market, said Wang Maolin.

Tourist Kang Liqin agrees, saying, "Some cities advertise nationwide for tourists, but their capacities are limited." Complaints the NTA has been receiving indicate disputes between tourists and travel agencies have increased due to insufficient infrastructure at tourist destinations.

Wang Maolin believes that the excessive exploitation within the travel market has destroyed part of the resources--a pressing problem for the industry which could do it much harm in the future.

"Some scenic areas are building high-profile hotels, restaurants and entertainment facilities to pursue short-term economic returns at the price of the sustainability of tourist resources," said Wang. "It's quite short-sight."

In addition, tourists who lack a sense of environmental protection and cultural awareness have endangered the longevity and original look of ancient relics by engraving their names or climbing on them.

Wang calls for the sustainable development of travel resources, a development plan of national tourism resources and the drafting of related state regulations and rules to guide and coordinate the use of tourism resources.

Shao Qiwei holds similar opinions. He said the NTA would encourage companies and institutions to train management teams with international outlook and a spirit of innovation to prepare for competition in the global tourist market. He said the NTA, to facilitate the development of information and networks, would use hi-tech solutions to coordinate and monitor the development of tourism resources, and ensue the sustainability of the Chinese tourism industry.

"At the same time, we must improve the quality of service," Shao added. "In particular, we must strengthen the training of frontline employees including those in hotels and restaurants, as well as tourist guides, to broaden their horizons and enhance their skills and services."