Regulatory restrictions that prevent foreign travel companies from expanding into China are expected to ease as the government creates a more friendly environment for foreign players.

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On January 18, Shao Qiwei, director of China National Tourism Administration (CNTA), announced that foreign travel agencies would be permitted to set up branch offices nationwide from July 1, 2007 as part of a commitment the country made to the World Trade Organization (WTO) to open the tourism sector by 2007.

The move wins a warm welcome from both experts and foreign companies.

Establishment of branch offices had been forbidden to foreign companies except in the cities of Beijing, Shanghai, Guangzhou, Shenzhen and Xi'an.

"The deregulation is meaningful. They (foreign companies) could strengthen networks, reputation and brand awareness here," said Li Mingde, senior researcher with Tourism Study Center at the China Academy of Social Sciences.

"This means that travel industry will then be fully open six years after China's accession to the WTO, as scheduled," said Liu Zinan, director of sales and account management with Hogg Robinson Group (HRG) China.

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