China is to abolish regulations that restrict foreign companies to a minority stake in mainland port facilities from April 1, the South China Morning Post reported, citing the State Development Planning Commission.
The regulations, which are contained in detailed guidelines relating to a new four-category classification of foreign investment published in February, will allow foreign investors to take a controlling stake or to wholly own terminal facilities and their operating companies, an SDPC official said.
The liberalization of foreign ownership will apply only to terminals, not the ports themselves, which will remain in the hands of port authorities, the paper said.
Water-transportation investments at present are classified as a restricted "B" category, making approval for projects time-consuming and complicated. The new catalogue cancels B-classified foreign-investment criteria, setting central government pre-clearance requirements only for projects exceeding US$30 million, the paper said.
But industry experts said the liberalization of port facility ownership is unlikely to happen overnight.
"The new act is important because the old regulations were out of date and foreign investors were looking for new assurances before considering investments in this sector," said John Grobowski, a lawyer at Baker & McKenzie who specializes in foreign investment in China.
William McHugh, chairman of CSX World Terminals (Asia), said: "It is a positive, solid move that gives foreign investors some flexibility.
"We are not going to see billions of dollars worth of investment pouring in overnight, but it definitely is an opportunity for foreign enterprises to take a larger role."
(Xinhua News Agency March 28, 2002)
