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Overseas investment in the advanced transport market has exceeded domestic investment in the sector for the first time, the Ministry of Communications announced yesterday.
Of 47 new projects approved by the ministry last year, overseas investment accounted for 51 percent of the total registered capital.
In 2004, a total of 88 overseas funded projects were approved by the ministry, an increase of 44 percent on the previous year and a result of huge road construction projects and an opening passenger transport market that has bred opportunities for overseas investors.
Overseas investment in the market has seen year-on-year rises since it was opened up at the end of 2001, said Xu Baoli from the communications ministry.
Thanks to the implementation of the Closer Economic Partnership Arrangement (CEPA) between Hong Kong and Macao special administrative regions and the mainland, investors can take advantage of preferential policies, Xu said.
"The increasing demand for road cargo transport, propelled by rapid economic growth, has been a catalyst since the nation is short of competitive enterprises that offer third-party services to customers," he said.
"This year marks the first year of China's market being fully open to overseas capital in logistics, road cargo transport and vehicle maintenance, and a new wave of overseas investment is expected to sweep in," said Xu.
In line with WTO commitments, China will permit WTO members to establish overseas-funded enterprises in the fields of road cargo transport and vehicle maintenance from this year.
Meantime, passenger transport companies from Hong Kong and Macao are allowed to operate businesses between the two special administrative regions and some mainland cities by building joint ventures, Xu said.
They will also be allowed to operate taxi or bus businesses in major cities, Xu said.
The nation plans to build an 85,000-kilometer expressway network within the coming 30 years to serve rapid economic growth.
Road construction has been mainly financed by domestic commercial loans and various government budgetary funds, which usually cover around 90 percent of total investment.
"Overseas investment has also entered the road construction sector and plays an important role," said Li Xinghua, deputy director of the ministry's Department of Comprehensive Planning.
Overseas investment includes loans from the World Bank, the Asian Development Bank, government loans from some countries and direct investment from overseas companies, Li said.
(China Daily April 26, 2005)
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