Foreign firms will also be allowed to take controlling stakes in joint ventures, according to the country's tourism regulator.

Foreigners will be able to operate in five major cities - Beijing, Shanghai, Guangzhou, Shenzhen and Xi'an - and at government designated resort areas, the National Tourism Administration said on its website.

The new provisions will come into effect in 30 days, the regulator says in a circular dated June 12.

The government promised to open its lucrative tourism market to foreign players under the terms of its entry into the World Trade Organization (WTO) in December 2001.

It has said it will allow foreign partners in joint ventures to hold majority stakes by this year and allow fully foreign-funded companies by 2005.

China has already approved at least a dozen Sino-foreign joint venture travel agencies.

Foreign-controlled companies would be barred from organizing tours of Chinese citizens traveling overseas or to Hong Kong, Macao and Taiwan, the circular says.

Only foreign companies with annual revenues of US$500 million (S$865 million) or more would be allowed to invest solely owned agencies and those seeking a controlling stake in a joint venture would have to have revenue of at least US$40 million, it says.

Foreign firms normally would be limited to establishing one venture with registered capital of no less than 4 million yuan (US$837,000).

(China Daily June 15, 2003)