China Law Update

Pages113-155
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CHINA LAW UPDATE
I. LAWS AND REGULATIONS
A. The New Tourism Law of the People’s Republic of China1
The Tourism Law of the People’s Republic of China came into
effect on October 1, 2013 and is the first law targeting the tourism
industry. This new legislation contains 112 articles and is designed to
regulate the tourism market, safeguard tourists’ rights and interests,
ensure reasonable use of resources, and foster the industry’s
sustainable and healthy growth. 2 More specifically, it addresses
several prominent problems faced by the Chinese tourism industry,
including “zero- or negative-fare tours, designated shopping places
and activities requiring additional payment, and tourist behavior. An
overview of these problems and the relevant provisions will be given
below.
1. Zero- or Negative-Fare Tours
One of the problems addressed by the new Tourism Law is the
notorious practice of zero- or negative-fare tours, which refer to tour
services sold by travel agencies at or below cost in order to attract
travelers, who are later compelled to shop at designated places for
commission or tip agents during their tours.3 This practice poses
much harm to the industry since it distorts the normal mode of
operation of travel agencies and harms the legal interests of tourists.4
Article 35 sets out a prohibition on this practice by stating that
“[t]ravel agencies are prohibited from organizing tourism activities
and luring tourists with unreasonably low prices, or getting
illegitimate gains such as rebates by arranging shopping or providing
tourism services that requires additional payment.”5 Examples of
luring tourists include: 1) using unreasonably low prices to attract
travelers to join the tour, 2) concealing the fact that the prices are
below the actual costs of conducting the tour, 3) concealing facts
about designated shopping places and activities requiring additional
payment, and 4) not informing the traveler of the fact that the travel
1 This update is prepared by Deng Xijun, J.D. Candidate, University of Toronto, Faculty of Law.
2 Lu Hui, China Adopts Law to Regulate Tourism, XINHUA NET (Apr. 25, 2013),
http://news .xinhuanet.com/english/china/2013-04/25/c_132339516.htm.
3 Xinhua Insight: New Law Clears Way for China's Tourism Future, XINHUA NET (Sept. 30, 2013),
http://news.xinhuanet.com/english/indepth/2013-09/30/c_132765325.htm.
4 Zhonghua Renmin Gongheguo Lüyou Fa Shiyi (中华人民共和国旅游法释义) [Interpretation on
the Tourism Law], CHINALAWINFO, http://vip.chinalawinfo.com/newlaw2002/SLC/
SLC_SiyItem.asp?Db=SyItem&Gid=838872641 (interpretation on art. 35).
5 Lüyou Fa (旅游法) [Tourism Law] (promulgated by t he Standing Comm. Nat’l People’s Cong.,
Apr. 25, 2013, effective Oct. 1, 2013) art. 35 (Chinalawinfo).
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114 TSINGHUA CHINA LAW REVIEW [Vol. 6:109
agency profits from his or her spending during the tour. The term
illegitimate gains include monetary payments such as commissions
and fees per person, which are extra charges requested by some
travel agencies, as well as non-monetary benefits. The Interpretation
of the Tourism Law defines unreasonably low prices as prices that
are set below the costs of operation and providing services, with
some exceptions for certain types of discounts after costs have been
recouped.6
2. Designated Shopping Places and Activities Requiring
Additional Payment
The new law also prohibits travel agencies from taking tourists to
designated shopping places and tourism activities that require
additional payment according to the second paragraph of Article 35.7
This practice of compelling travelers to shop at designated places or
to pay for additional activities is closely associated with the practice
of zero- or negative-fare tours. It adversely affects the normal
operation of the market economy by creating unfair competition
among the sellers since the sellers that cooperate with travel agencies
are able to increase their sales more easily.8 Another harm posed by
this kind of practice is that tour guides who earn their income mainly
based on commissions tend to neglect the quality of their services
and the interests of the travelers, which have caused disputes to arise
between the two sides.9 Moreover, the designated sellers typically
set prices much higher than the local market price and make
payments to travel agencies out of the additional earnings. As a
result, travelers are deceived as to the real market price of the goods
and their interests are harmed by such actions. With the new law in
place, travel agencies are prohibited from using direct or indirect
methods to compel or guide travelers to shop at designated places as
well as arranging activities that require additional payment.10
6 Zhonghua Renmin Gongheguo Lüyou Fa Shiyi (中华人民共和国旅游法释义) [Interpretation on
the Tourism Law], CHINALAWINFO, http://vip.chinalawinfo.com/newlaw2002/SLC/
SLC_SiyItem.asp?Db=SyItem&Gid=838872641 (interpretation on art. 35).
7 Lüyou Fa (旅游法) [Tourism Law] (promulgated by t he Standing Comm. Nat’l People’s Cong.,
Apr. 25, 2013, effective Oct. 1, 2013) art. 35 (Chinalawinfo).
8 Zhonghua Renmin Gongheguo Lüyou Fa Shiyi (中华人民共和国旅游法释义) [Interpretation on
the Tourism Law], CHINALAWINFO, http://vip.chinalawinfo.com/newlaw2002/SLC/
SLC_SiyItem.asp ?Db=SyItem&Gid=838872641 (interpretation on art. 35).
9 Fu Xiangjun (符向军), Lüyou Fa Shishi Yibanyue, Youke Daoyou Ruhe Shuangying (旅游法实施
已半月, 游客导游如何双赢) [The Tourism Law Has Been Implemented for Half a Month, How
Tourists and Tour Guides Can Both Win], RENMI FAYUAN BAO (人民法院报) [PEOPLES COURT
DAILY], Oct. 18, 2013, at 2.
10 Zhonghua Renmin Gongheguo Lüyou Fa Shiyi (中华人民共和国旅游法释义) [Interpretation on
the Tourism Law], CHINALAWINFO, http://vip.chinalawinfo.com/newlaw2002/SLC/
SLC_SiyItem.asp?Db=SyItem&Gid=838872641 (interpretation on art. 35).
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An exception made by Article 35 is that it does not include
“circumstances where both sides have agreed or the tourists have
requested such arrangements and there is no influence on the
itineraries of other tourists”.11 When the travel agency intends to
include shopping activities or activities requiring additional payment
in its tour, it must obtain the consent of the travelers by providing
them with truthful information about the shopping place or activity,
including the name of the shopping place, price of the activity and
length of time. In addition, the travel agency must make reasonable
plans for those travelers who do not wish to participate in the
shopping or optional activities so that their time is not wasted.12
3. Regulating Tourist Behavior
In addition to regulating industry practice, certain provisions in
the new Tourism Law are aimed at regulating tourist behavior,
including Articles 13, 14 and 41.13 These articles are designed to
address the growing criticism of the behavior of Chinese tourists
travelling domestically and abroad due to incidents related to
damaging historical relics and lack of respect for local culture and
traditions.14 They set out specific requirements for tourists to abide
by the norms of civilized tourist behaviors, respect local customs,
cultural traditions and religious beliefs, protect the environment,15
and not harm the local peoples rights and interests when settling a
dispute.16 Tour guides also have the responsibility of explaining to
tourists the norms of civilized tourist behavior and prevent behavior
that violates social morality. 17 The norms of civilized tourist
behavior refer to the guidelines and convention for tourists traveling
abroad that were published by the Chinese National Tourism
Administration in 2006.18 The Regulations of the Peoples Republic
of China on Administrative Penalties for Public Security also set out
11 Lüyou Fa (旅游法) [Tourism Law] (promulgated by t he Standing Comm. Nat’l People’s Cong.,
Apr. 25, 2013, effective Oct. 1, 2013) art. 35 (Chinalawinfo).
12 Zhonghua Renmin Gongheguo Lüyou Fa Shiyi (中华人民共和国旅游法释义) [Interpretation on
the Tourism Law], CHINALAWINFO, http://vip.chinalawinfo.com/newlaw2002/SLC/
SLC_SiyItem.asp?Db=SyItem&Gid=838872641 (interpretation on art. 35).
13 Lüyou Fa (旅游法) [Tourism Law] (promulgated by t he Standing Comm. Nat’l People’s Cong.,
Apr. 25, 2013, effective Oct. 1, 2013) art. 13, 14, 41 (Chinalawinfo).
14 Anup Kaphle, Chinese Tourists’ Bad Manners Harming Country’s Reputation, Says Senior
Official, WASHINGTON POST (May 17, 2013), http://www.washingtonpost.com/blogs/worldviews/wp
/2013/05/17/chinese-vice-premier-says-chinese-tourists-bad-manners-is-harming-china/.
15 Lüyou Fa (旅游法) [Tourism Law] (promulgated by t he Standing Comm. Nat’l P eople’s Cong.,
Apr. 25, 2013, effective Oct. 1, 2013) art. 13 (Chinalawinfo).
16 Id. art. 14.
17 Id. art. 41.
18 Zhonghua Renmin Gongheguo Lüyou Fa Shiyi (中华人民共和国旅游法释义) [Interpretation on
the Tourism Law], CHINALAWINFO, http://vip.chinalawinfo.com/newlaw2002/SLC/
SLC_SiyItem.asp?Db=SyItem&Gid=838872641 (interpretation on art. 35).

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