Caixin
Oct 11, 2022 07:35 PM
BUSINESS

Eased Foreign-Funded Travel Agency Rules No Sign of Pandemic Policy Change, Sources Say

What’s new: China has tweaked its tourism rules to allow foreign-funded travel agencies in the cities of Tianjin, Shanghai, Chongqing and the province of Hainan to provide outbound tourism services, though sources said the change should not be read as a sign the country will soften its pandemic controls.

A decision published Saturday by the State Council, China’s cabinet, temporarily removes restrictions that prevented travel agencies funded by foreign capital from providing outbound services to Chinese mainland tourists in those cities. Travel to Taiwan remains excluded.

The regulatory change will be in effect until April 8, 2024, according to the decision, which says the move is part of a broader effort to reform and liberalize the service industry.

While some in the industry took the development as a sign China’s “zero-Covid” policy may be about to relax, sources told Caixin it is no such thing. The change is only about the approved business scope of the agencies, they said.

The context: Outbound tourism has been restricted in China since the pandemic began in 2020, with travel abroad limited to those with urgent reasons.

In 2021, the revenues of foreign-invested travel agencies in China only accounted for 0.84% of the industry’s total.

China’s tourism has been struggling due to outbound travel restrictions as well as domestic Covid lockdowns. During the weeklong National Day holiday ending Oct. 7, domestic tourism revenue declined 26% to 287 billion yuan ($40.3 billion) from a year ago. Compared with pre-pandemic levels in 2019, revenue was down nearly 56%, according to data from the Ministry of Culture and Tourism.

Related: Tougher Covid Measures Drag Mid-Autumn Festival Spending

Quick Takes are condensed versions of China-related stories for fast news you can use.

Contact reporter Guo Yingzhe (yingzheguo@caixin.com) and editor Bertrand Teo (bertrandteo@caixin.com)

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