INTERIM MEASURES FOR TRIAL CHINESE-FOREIGN EQUITY JOINT VENTURE OF TRAVEL AGENCIES

The National Tourism Administration, the Ministry of Foreign Trade and Economic Cooperation

Circular of the National Tourism Administration and the Ministry of Foreign Trade and Economic Cooperation on Modifying Interim Measures
for Trial Chinese-foreign Joint Venture of Travel Agencies

LvBanfa [1999] No.061

April 19, 1999

Bureaus of tourism administration and foreign trade and economic cooperation commissions (departments, bureaus) of various provinces,
autonomous regions and municipalities directly under the Central Government:

On December 2, 1998, under the approval of the State Council, the National Tourism Administration and MOFTEC jointly promulgated
Interim Measures for Trial Chinese-foreign Travel Agencies of Equity Joint (hereinafter referring to as Interim Measures), which
have errors in wording. Now the full text has been modified, please implement accordingly.

This is hereby notified.

Interim Measures for Trial Chinese-Foreign Equity Joint Venture of Travel Agencies

Article 1

With a view to further expanding the opening-up and promoting development of tourism, these measures are promulgated in line with
Law of the People’s Republic of China on Chinese-foreign Equity Joint Ventures and Management Regulations of Travel Agencies, as
well as other relevant laws and regulations.

Article 2

These measures are applicable to Chinese-foreign Equally joint ventures of travel agencies (hereinafter referred to as joint venture
travel agencies) established within the territory of China by foreign companies or enterprises and Chinese companies or enterprises.

Article 3

The Chinese partner applying to establish joint venture travel agencies must meet the following conditions:

1.

Be an international travel agency.

2.

The average annual number of foreign-related travelers in the three years prior to the application shall be over 30,000 people a day.

3.

The annual average sales volume of tourism in the three years prior to the application shall be over 50 million yuan.

4.

Be a formal member of Chinese Association of Tourism.

Article 4

The foreign partner applying to establish joint venture travel agencies must meet the following conditions:

1.

Be a travel agency engaged in international tourism of an enterprise that has wholly-owned travel agencies engaged in international
tourism.

2.

The annual sales volume of tourism shall be over $ US 50 million.

3.

Have accession to computer subscription network at home and abroad, or have a computer subscription network of its own.

4.

Be a formal member of Chinese Association of Tourism.

Article 5

Joint venture travel agencies must meet the following conditions:

1.

Registered capital of no less than RMB 5 million yuan.

2.

Be limited liability corporation.

3.

The shares of the Chinese contribution to registered capital shall be no more than 51%.

4.

The legal representative appointed by Chinese party.

5.

Business places, facilities and operating personnel that meet legal requirements.

6.

The duration of the joint venture is limited within 20 years.

Article 6

Joint venture travel agencies must pay quality cash deposit in accordance with the regulations of entry tourism for international
travel agencies.

Article 7

The examination and approval procedures of joint venture travel agencies are:

1.

The Chinese partner shall submit such documents as the project proposal and the feasibility study report to the tourism administration
departments of the provinces concerned (autonomous regions, municipalities directly under the Central Government) or municipalites
separately listed on the State plan. The latter will transmit to National Tourism Administration after its preliminary examination.

For Chinese partner that is enterprise under Central Government, the above-mentioned documents shall be examined by its higher authority
before being reported to the National Tourism Administration.

The National Tourism Administration shall examine and approve the documents in accordance with the State laws and regulations concerning
the management of tourism.

2.

The Chinese partner, after obtaining the written approval from the National Tourism Administration, shall submit such documents as
contract and articles of association of joint venture travel agencies to the competent authorities of foreign trade and economic
cooperation at provincial level. The latter shall submit the documents to the Ministry of Foreign Trade and Economic Cooperation
(hereinafter referred to as the MOFTEC) after its preliminary examination.

For Chinese partner that is enterprise under Central Government, the above mentioned documents shall be examined by the higher authorities
before being submitted to the MOFTEC.

The MOFTEC shall examine and approve the documents in accordance with the State laws and regulations concerning foreign investment.

3.

For projects approved to be set up, the Chinese partner shall go through formalities of registration and tax procedures, by presenting
the Certificate of Approval for Foreign-funded Enterprises issued by the MOFTEC and the Business License of Travel Agencies issued
by the National Tourism Administration.

Article 8

The following documents shall be submitted for applications for establishing joint venture travel agencies:

1.

Qualification evidence of the Chinese partner including a copy of the business license, the business license of travel agencies, annual
examination reports for three years prior to the application, and the certificate of membership of the relevant tourism associations.

2.

Qualification evidence of the foreign partner including a copy of registration, a bank credit certificate, financial status papers
issued by certified accountants’ offices, a certificate of accession to subscription networks issued by the relevant computer companies,
a certificate of membership of tourism associations of their own countries and the annual report of the year prior to the application.

3.

Project proposal of the joint venture travel agency

4.

Feasibility study report of the joint venture travel agency

5.

Contract and articles of association of the joint venture travel agency

6.

Other documents required by the laws, regulations, or the examination and approval departments

Article 9

Each foreign partner may establish only one joint venture travel agency in China.

Article 10

Joint venture travel agencies are now not allowed to establish branches during the experiment period.

Article 11

Joint venture travel agencies may run business in entry tourism and domestic tourism.

Article 12

Joint venture travel agencies are now not allowed to run business in Chinese citizens’ traveling to other countries and to Hong Kong,
Macao and Taiwan.

Article 13

Special tourism items and traveling to special regions operated by joint venture travel agencies must be examined and approved by
the National Tourism Administration and other relevant departments.

Article 14

Joint venture travel agencies are not allowed to run travel items that include gambling, addictive drug taking, and obscene contents
and other items that are harmful to social ethics and people’s physical and mental health. No item that will impair the national
interests and dignity of China is allowed to organize, and items that include contents violating Chinese laws and regulations are
prohibited.

Article 15

The recruiting of tourist guides in China by joint venture travel agencies should be handled in accordance with the relevant regulations
of the State.

Article 16

Joint venture travel agencies are subject of the management of the tourism administration departments.

Article 17

Joint venture travel agencies shall submit financial, accounting, and statistical reports to tourism administration departments and
other relevant departments for business examination.

Article 18

Foreign exchange revenue and expenditure of joint venture travel agencies are subject to rules applicable to foreign-funded enterprises.

Article 19

Joint venture travel agencies must abide by the laws and regulations of China and are subject to Chinese jurisdiction and their legitimate
business activities and interests are protected by Chinese laws and regulations.

Any violation of Chinese laws and regulations by joint venture travel agencies shall be dealt with in accordance with relevant laws
and regulations.

Article 20

Violations of the above measures shall be punished by tourism administration departments according to the Management Regulations of
Travel Agencies and the Detailed Rules for the Implementation of the Management Regulation of Travel Agencies.

Article 21

The Interim Measures for the Management of Examination and Approval of Establishing First-class Joint Venture Travel Agencies in National
Tourist Resorts shall still be valid when the above measures are implemented.

Article 22

Establishment of joint venture travel agencies by domestic investors and investors from Hong Kong, Macao and Taiwan shall be handled
with reference to the above measures.

Article 23

These Regulations shall be interpreted by the National Tourism Administration and MOFTEC.

Article 24

These Measures shall come into force as of the date of promulgation.