BRITAIN’S £75 billion tourism industry will be given a major boost next month when the UK signs an historic agreement with China that will for the first time enable all Chinese citizens to travel to this country as tourists.

The award of so-called approved destination status (ADS) to the UK is to be accompanied by a streamlined visa application system that will allow Britain to compete for a share of the predicted fivefold increase in Chinese outbound travel by 2010.

The ADS agreement will include a clause under which China will agree to take back tourists who overstay their visas or fail to return with their tour group. In the past the Government has found it difficult to persuade China to take back failed asylum-seekers.

Under current rules the Chinese are allowed to travel to the UK only for specific purposes, mainly for business or for education, although they can also apply for visas to visit relatives. In 2002 more than 28,000 Chinese applied to British universities.

A Home Office spokeswoman refused to be drawn on details of the agreement but said that some minor changes to immigration laws would be required to ensure a smooth transition. “This will be a great benefit to the UK economy, but only if it’s properly managed,” she said.

Last year only 68,000 Chinese citizens visited Britain, spending £127 million. In contrast, visitors from the US, the biggest supplier of tourists to Britain, numbered 3.3 million. They spent £2.3 billion.

The huge growth in outbound tourism from China has been fuelled by a rise in living standards that in turn has led to a relaxation of constraints on travel.

In a recent report, Chinese Outbound Tourism, the World Tourism Organisation said that the amount spent by Chinese tourists overseas had jumped from $2.8 billion (£1.5 billion) to $10.9 billion between 1994 and 1999. It said that the continuing relaxation of travel restrictions — some 30 countries or regions now have ADS — meant outbound tourism was growing 12.5 per cent a year, three times the global average.

At present the majority of Chinese travellers make short-haul visits to destinations such as Hong Kong, Macau, Thailand and India. But long-haul travel is growing rapidly and by 2020 the number of overseas trips is expected to have risen to 100 million, putting China in the top three outbound markets.

VisitBritain, the official tourism marketing body, has been pushing hard for ADS recognition and in October will join the British Incoming Tour Operators’ Association in leading a delegation of senior industry figures to Beijing.

VisitBritain has a regional office in Hong Kong, but a spokesman said last night: “In the future, if China takes off, then we would probably look to open an office in Beijing.”

According to UK tour operators, limits on the number of flights between Britain and China may hamper efforts to cash in on the extra demand.

Carey Fletcher, a director of London-based China Holidays, said: “How are they going to get here? That’s the only constraint. There’s plenty of accommodation but there’s not much flight capacity.”