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Railway cargo market open to foreign investment
2002/02/11

Beijing - In the coming years, China will gradually open up its tightly controlled railway transportation sector to foreign companies, China Daily reports on Monday.

In a first step, the Ministry of Railways will allow foreign firms to set up joint ventures in the domestic railway cargo market. From this year to 2003, however, the Chinese partners should hold the majority of the shares in such joint ventures.

From 2004 to 2006, the foreign firms will be allowed to hold a majority stake in the company. After 2006, the domestic railway cargo market will be fully open to foreign companies.

Opening up the railway sector is one of the many promises China has to fulfill under its recently achieved membership of the World Trade Organization (WTO). Different from the cargo business, railway passenger transportation will not be affected by the WTO entry, China Daily writes. Therefore, the cargo and passenger transportation operations will soon be separated.

According to railway minister Fu Zhihuan the country will as well put several profitable railway lines up for international bidding in the near future.
The government will also welcome foreign investment in railway construction. The country badly needs more railway tracks to comply with the domestic railway transportation needs. But so far foreign investors have been reluctant, as the return on investment in railway construction requires a long-term commitment.

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