Foreign and private companies are being encouraged to participate in Shanghai's port business in a move to decrease the port's business costs and thereby enhance competitiveness, according to the Shanghai port administration.

Now foreign and private investors will be allowed to buy into both facility construction and operation of public piers in China.

Shanghai will further improve the mechanism to open up Shanghai port construction and operations, creating an open and fair competitive environment, said Shanghai Municipal Port Administration Bureau Director Xu Peixing.

"We should attract foreign as well as private capital into this area to make a fair-play marketplace," he said at a working conference Tuesday.

Concerning Shanghai port construction, foreign companies can co-invest with Chinese partners to build wharves. Shipper's wharves can be fully-owned by foreign companies.

Shanghai is also inviting foreign investors to set up joint ventures to conduct international shipping operations.

"We should allow all sources into the port to build Shanghai into an international shipping center," he said.

He added that administrative departments should publish related policies and guidelines to facilitate and protect foreign investment, giving them domestic treatment in terms of registration, taxation, information sharing, marine management, arbitration and services, finance and insurance.

"The general policy is that investors are decision-makers and beneficiaries as well as risk-takers," he said.

Shanghai has set its goal to be an international shipping center in 2020.

Reports from the Ministry of Communications estimated that Shanghai's port will handle 25 million 20-foot equivalent units (TEU) in 2010, more than double that of last year.

Although Shanghai has made significant progress in the field of port infrastructure, the city's container-handling capacity still has failed to meet the rising demand.

In 2003, Shanghai recorded a nearly 20 percent year-on-year increase in cargo to 316 million tons. It handled 11.3 million TEUs, 134 percent of its designed capacity.

Xu expects this year's volume to exceed 13 million TEUs.

Shanghai is now the world's third-largest container port and fourth-largest port overall, driven by the rapid development of foreign trade in the Yangtze Delta as well as the vast hinterland.

Currently, suffering from a lack of deep-water berths, Shanghai is building the Yangshan Deep Water Port. The two-decade project calls for the construction of 33 deep-water berths on Yangshan Island, which sits 27.5 kilometers from the city's southern coast.

The first phase, to be completed by 2005, will cost 14.31 billion yuan (US$1.75 billion). The five berths will be put into use in early 2006, and four more will start operations in early 2007.

The 32-kilometre-long bridge linking Yangshan Port and Shanghai will be completed in the first half of next year.

The fifth phase of Waigaoqiao Port in Shanghai, currently under construction, will finish by the end of this year and start operations in 2005.

(China Daily February 25, 2004)