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Restrictions on shares held by foreign capital in transportation joint ventures have been eased in southwest China's Chongqing municipality, according to official sources.
Since Dec. 1, foreign companies are permitted to set up Chinese-foreign transportation enterprises in the city and can hold up to 75 percent of shares, according to the Communication Department of Chongqing.
China was required to open its transportation sector in the first year after joining the WTO, and to allow foreign companies to have control in the second year. In the third year, foreign companies must be allowed to set up solely-funded transportation enterprises.
Analysts said the larger shareholding power will encourage the flow of more foreign capital into the transportation sector, in both passenger and freight services.
Foreign companies may encounter difficulty in entering the passenger transport market in Chongqing as it is a mature market with relatively full competition, said Li Xingzhi, a local transport company manager.
However, the city's freight transport is underdeveloped and foreign companies have an opportunity to exploit this market, Li added.
(Xinhua News Agency December 18, 2002)
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