Chinese authorities plan to invest 1.8 billion yuan (about HK$1.71 billion) to build a new deep-water container port to transform Shanghai into a world-class and major international shipping centre. Construction in phase one includes building five berths of 15- metre draught which will be completed by the end of the 10th Five-Year Plan in 2005. Shanghai vice-mayor, Han Zheng, said the new port would become accessible to mega container vessels with capacities of between 5,000 and 6,000 teu (20- foot equivalent unit), popularly known as fifth and sixth generation containers vessels. The port project will give Shanghai an additional 38.7 square kilometres in dock land. The first phase of the project, with an investment of 200 million yuan, was completed in June. The peninsula will stretch into a 30- km belt from Shi Pile Port in eastern Shanghai's Nanhui District to north of Hangzhou Bay. Shanghai port, which handled 4.21 million teu last year, is also stepping up efforts to become an international shipping hub because of fierce competition from neighbouring ports, such as Kobe, Tokyo and Yokohama in Japan, and Pusan in South Korea. Shanghai port is expected to handle more than 5 million teu this year and 8.5 million teu a year by 2005. It is also preparing for the anticipated increase in business when the mainland joins the World Trade Organisation, an event all multinational companies with interest in China are waiting to happen. Vickers Ballast Investment's head of research, Elvic Ng, said: 'Everybody is looking for strong growth in China trade. All major ports in the mainland will benefit.' The strong growth trend among Chinese ports will probably slow down as the United States, Europe and Asian economies weaken, but a surge is expected again with the mainland's accession to the WTO, he added. The main reason for the recovery of Asian countries from the region's financial crisis was the rebound in intra-Asian trade, rather than increased exports to the United States or Europe, Mr Ng said. Shanghai port will benefit from the growth in trade to Korea and Japan, he added. Over the last few years, the port, which is well connected to a modern transport network involving highways, water routes, railways, and air travel, has greatly expanded its business. The century-old port now has 286 berths, including 93 capable of accommodating 10,000-tonne class vessels. Besides the new deep-water port project, Shanghai completed last year its largest infrastructure project - the Pudong International Airport - at an initial cost of 13.3 billion yuan. The airport covers 12 sq km and can handle 20 million passengers and 750,000 tonnes of cargo a year. 'The construction of a deep- water port, along with the other centres, will lay the foundation for the city's economic growth in the new century,' Mr Han said, adding that the various projects are expected to fuel economic growth in the entire Yangtze River valley and central and western parts of the country. The State Development Planning Commission is now studying the details of the deep water port project, an international central airport project and international cyber port project, details of which are not available. The city plans to become Asia's major airline hub and major information hub in five to 10 years, capitalising on its favourable geographical location and high-quality aviation facilities. The Waigaoqiao scheme will complement HPH's existing investment in Shanghai Container Terminal.