China's civil aviation regulator announced Monday that an industry
regulation amended to give foreign investors wider access to
China's aviation market will take effect on August 1.
A
document from the General Administration of Civil Aviation of China
(CAAC) showed that foreign companies will be allowed to invest in
all domestic airlines and that their share-holding limitations will
be lifted to 49 percent from the current 35 percent.
The new regulation is being enacted to enable Chinese companies to
hold relatively major shares in such cooperations.
Investment methods have also been varied under the new plan.
Besides the previous mode of joint ventures, foreign companies can
now get their shares by buying stocks and through other authorized
means of investment.
Business, agriculture and industrial flights will now be open to
foreign investors, though defence-related flights will still be
restricted for safety and strategy purposes.
Chinese investors can hold major shares in air services involving
business and tourism, while foreign companies can hold major shares
in agriculture and forestry so long as their Chinese partners
agree.
The investment percentage of ground services is redefined in the
new regulation. The 49 percentage share-holding limitation of
aviation oil supply and aircraft maintenance remains, while the
limitations for cargo storage, aviation food supply and ground
services are being opened up to cooperation on both sides.
CAAC said in the document that this modification, part of China's
opening-up process, was needed to meet expanding market demands now
that China has joined the World Trade Organization (WTO).
The new regulation was co-drafted by the CAAC, the State
Development Planning Commission and the Ministry of Foreign Trade
and Economic Cooperation. It had previously been authorized by the
State Council.
It
will replace the former regulation in effect since 1994.
(China
Daily July 02, 2002)