China represents a huge opportunity for the development of world tourism in the coming years. Now this opportunity has come closer as China's admission into the WTO (World Trade Organisation) has occurred. This has raised the expectation that foreign firms will explore and benefit from Chinese outbound market growth. However, what are the risks associated with entry into the Chinese outbound market? What strategies are most likely to succeed in the Chinese outbound market? This research is a timely study undertaken to examine the structure of the Chinese outbound tourism industry, its characteristics and the influencing factors which drive its evolution. Successful entry strategies can only grow out of sophisticated understanding of industry structure and how it evolves. Based on a review of the Chinese travel history, the competitive theories of West and East, and a thorough analysis of industrial practice in China, a conceptual framework for industry structure has been created in Chapter Four. The conceptual framework is tested by a random sample of 210 personal interviews with Chinese travel operators in Beijing, Shanghai and Qingdao. The findings of this research demonstrate that Australia holds a favourable market position in the current and future Chinese outbound industry. The research demonstrates that Australia's unique position is derived from a market perception of 'famous, fresh and authentic', a profile that can serve Chinese market needs in the coming years. The research also shows that the current outbound industry structure in China is the outcome of government policies. It has high barriers to entry. However, future industry structure and market competition will be determined by a company's capability to perform (including firm capability, structure and performance, strategy for future and product offerings). Finally, the research analyses the choices of entry strategy available for Australian travel firms, and the possible future direction for market growth under WTO open policies. research demonstrates that Australia's unique position is derived from a market perception of 'famous, fresh and authentic', a profile that can serve Chinese market needs in the coming years. The research also shows that the current outbound industry structure in China is the outcome of government policies. It has high barriers to entry. However, future industry structure and market competition will be determined by a company's capability to perform (including firm capability, structure and performance, strategy for future and product offerings)