Yantai open to foreign cash on highway project

Yantai, in Shandong province which has China's best highway network, wants to sell operating rights to the 160 km Yantai-Weihai highway to foreign investors.

Sun Zhiyuan , deputy secretary-general of the Yantai municipal government, said transferring completed projects would shorten the return period for new investors.

'It will increase the attraction of the project and solve our capital problem,' Mr Sun said. Details on the transfer of the highway, reported to have a good traffic flow, are still being worked out.

Mr Sun said Yantai was looking for foreign funds to support its Ninth Five-Year Plan.

'Our goal is to strive for a 100 billion yuan gross domestic product by 2000,' he said.

'To reach that goal, Yantai has to invest 110 billion yuan in fixed assets, with priority on industrial and infrastructure projects.' The key projects include a train-ferry service to link Shandong and Liaoning peninsulas, a car component plant with South Korea's Daewoo group and a nuclear plant.

Daewoo plans to set up car component plants in Shandong with the capacity for 300,000 cars.

'Daewoo plans to set up plants in Yantai, Qingdao and Weihai, with an investment of about 7.8 billion yuan. The parts will be shipped back to Korea for assembling,' Mr Sun said.

Daewoo is expected to take a 70 per cent interest in a project in Yantian to produce car engines.

Mr Sun said Daewoo's plans had received approval from the State Planning Commission and it was now undertaking a feasibility study.

He was confident the project would not be affected by the cancellation of tariff exemption on machinery imports, which took effect yesterday.

Mr Sun said Shandong and Liaoning were waiting for central government approval for the train-ferry project linking Yantai and Dalian.

The scheme would help improve the investment environment in northeast China.

The distance between Yantai and Dalian was more than 2,000 km by road.

Mr Sun said Yantai had listed a number of projects for foreign investment which would be promoted during the China East Asian Cities Trade Fair in Yantai in June.