"It is similar to the relationship between the United States Department of Transportation (DOT) and the Federal Aviation Administration (FAA)," the source said.

The FAA is an agency under the DOT, with the authority to regulate and oversee the US aviation industry.

Analysts said the reshuffle takes a significant step in government restructuring by streamlining administrative resources and cutting costs.

"Currently, China's logistics and transportation system is separately regulated by different government bodies. That has resulted in high costs, a waste of resources and low efficiency," Li Lei, an aviation analyst with CITICS China Securities, said.

"By integrating their functions, the new ministry can increase efficiency in the overall planning and management of transportation infrastructure," Li said.

He said effective communication and coordination within the ministry would be key to fulfilling its responsibility.

(China Daily March 13, 2008)