Private and foreign investors are expected to be granted equal status with state investors and will be allowed to hold controlling stakes in construction and management of ports, according to China's first law on ports, which will take effect on January 1, next year.

The central government will also issue regulations on port investment to regulate operation of foreign capital.

This is a progress following the issuance of investment guidance rules on foreign investment in April 2002, which ended restrictions on foreign ownership of ports to less than 50 per cent.

The implementation of the law is expected to attract a new wave of foreign investment into the sector, said Wang Jinwen, an official with the Ministry of Communications.

The law also protects legal benefits and rights of investors.

Moreover, local governments, especially those boasting large ports, are busy drafting detailed regulations to attract foreign and private investment.

Shanghai will allow various foreign investment modes, including establishment of wholly foreign-funded ports, said a local official.

After the implementation of the new port law, Shanghai's Yangshan deep-water port project could stimulate foreign investors to go into port construction and operation, said Li Bing, an official with local port administrative bureau.

Moreover, as a part of reforms, the central government has begun handing over 38 ports to local governments.

The reform process will be completed at the end of this year, according to sources.

In the post-WTO era, overseas investment can not only help speed up port construction, but also improve handling capacity, said Wang from the Ministry of Communications.

More than 90 per cent of China's foreign trade goes through ports. In 2002, the number of containers handled by Chinese ports amounted to 37 million TEUs (twenty-foot equivalent units), about 30 times the volume of 1989. China hopes to increase the capacity of its national ports to 3 billion tons by 2010.

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