Sources with the China Duty-free Group, which manages China's duty-free shops (except those in Shenzhen and Zhuhai), say that more shops will be opening to ensure that "all places frequented by foreigners are covered."

The group currently operates a network of 153 duty-free shops in 90 cities and border regions of 24 provinces, municipalities and autonomous regions. Annual sales top 200 million U.S. dollars, ranking it among the world's top 20 dealers in duty-free goods.

Among the new shops to open, there are three more in downtown Dalian, Xiamen and Qingdao. The Dalian shop is expected to open by the end of this year.

Compared with duty-free shops at entry-exit ports, downtown duty-free shops offer more variety and bigger floor space.

Gai Zhixin, general manager of the group, predicts that China's entry into the World Trade Organization (WTO) will bring opportunities as well as challenges to the group.

Among the major opportunities, China's WTO entry will increase overseas tourist numbers. A major challenge is that the group risks losing some conventional customers as China lowers import tariffs.

"We will improve our services while looking for new opportunities," says Gai. One of the moves being considered, he explains, is to open duty-free shops in other WTO member countries and regions.

China recorded more than 22.39 million entries and exits of overseas people in 2001, 10.48 percent above the previous year. Of this number, 11.23 million were people entering the country, a rise of 10.49 percent.

The majority came from Japan, the Republic of Korea, Russia, the United Sates, Malaysia, Singapore, the Philippines, Mongolia, Thailand and Britain.

(Xinhua News Agency March 25, 2002)