The regulation will be sent to the State Council for revision in March, said Yuan Yaohui, an official with CAAC.

The draft will suggest that in capital cities and major tourism cities, the state-owned shares of airports should be more than 51 percent, Yuan said. The regulation for domestic capital will be more open than that for overseas investment issued last year.

China revised the regulation on foreign investment in the civil aviation industry and began to allow more overseas capital, methods and range of investment starting from August 1, 2002.

A private enterprise has just been approved to buy Yichang airport with 600 million yuan (75 million US dollars), a trial of domestic investment in civil aviation.

China now has 143 airports, mostly state-owned. Rapid economic growth has boosted the pace of airport construction and renovation.

Fund-raising channels vary. Meilan Airport in the island Hainan Province issued H shares last year. Baiyun Airport in Guangzhou, capital of south China's Guangdong Province, has finalized the work for domestic listing.

Private Entrepreneur to Buy Airport

A Chinese dairy entrepreneur has been given the go-ahead to buy the Yichang Airport in central China's Hubei Province.

Yuan Yaohui, director of the Department of Policy and Regulation under the General Administration of Civil Aviation of China (CAAC), confirmed that the Junyao Group's application to buy the airport near the Three Gorges Project had been approved.

Wang Junyao, a renowned dairy businessman in east China, said that his group's 600 million yuan investment in the airport would be used for related purchase and renovation, adding that the groups would cement its cooperation with local tourist authorities for tapping the already thriving tourist market.

Yichang is about 30 km from the Three Gorges Project, a gigantic power generation and water conservation project.

The Three Gorges is known for its natural landscape and rich cultural relics. After the completion of the project, certain scenic spots will be submerged under the water level of the futurereservoir. As a result, so-called "farewell tours" to the Three Gorges have been booming in the past few years.

The Yichang Airport's profits are an obvious attraction. During last October's seven-day National Day vacation, some 85,000 tourists arrived at Yichang by air, land and river.

The number of passengers handled by the airport hit 800,000 last year, almost equal to a smaller one in a provincial capital.

Wang's deal is described as "entering the forbidden area." Before the transaction, he was the first individual to run chartered flights and the first entrepreneur to enter into China's aviation industry with an 18 percent share in China Eastern Wuhan Limited.

Founded in 1994 as a mainly dairy product business, Junyao Group is now involved in food, aviation and real estate industry.

(Xinhua News Agency February 11, 2003)