HUNDREDS of billions of yuan in annual losses due to insufficient freight capacity have prompted China to experiment with opening its railway system to foreign investment.
Railway Minister Han Zhubin said China could announce later this year the provisional rules governing foreign investment in developing and running railways, according to the semi-official Hong Kong China News Agency.
Those regulations would permit the ministry to issue bonds overseas, list some railway companies abroad and establish railway investment funds.
The report said, quoting sources, that the ministry hoped to issue US$3 billion in overseas railway bonds by 2000.
Foreign companies would also be allowed to establish joint ventures which could be used to develop property along the rail lines and set ticket prices.
The ministry has selected 11 work units to form experimental shareholding companies responsible for profits and losses during this year and next year.
It will also liberalise the price structure for freight transportation in an effort to make it a part of China's market economy.