THE territory's property giant Cheung Kong (Holdings) and jewellery distributor Fu Hui Jewellery are stepping up their operations in Fuzhou, with plans to develop a 440,000-square-metre site into a huge housing development scheme. The proposal followed the two companies' 3.5 billion yuan (about HK$3.14 billion) San Fang Qi Xiang preservation and redevelopment project in Fuzhou city. Albert Chow, deputy managing director of Cheung Kong, said talks over the huge project were under way. Mr Chow said he expected to finalise equity distribution among shareholders soon and that phase one of the project would have 100,000 sq metres of developable land area. The proposed project would be jointly developed by Cheung Kong and Fu Hui, with Fuzhou Industrial and Commercial Bank also expressing interest in the development. ''If the project pushes through, total investment cost for the phase one development will be 150 million yuan,'' said Mr Chow. The concept of the housing proposal is similar to Hong Kong's Home Ownership Scheme, which offers low-cost units to help solve housing shortages. Domestic housing schemes in China were thought to have great potential for investment, especially in Fuzhou and other major cities, because the housing shortages were now being addressed. The Chinese Government will guarantee an investment return of about 15 per cent for foreign investors and will set the selling price to make housing affordable to the city's home seekers. Fuzhou vice-mayor Gong Xiong said there were plans to develop a large housing scheme similar in size to the San Fang Qi Xiang preservation and development project. ''But it is difficult to find such a large plot of land in the city at the moment,'' said Mr Gong. The San Fang Qi Xiang development is one of the biggest redevelopment projects in China, and will take seven years to complete. It will consist of residential buildings, offices, schools and entertainment facilities and will also encompass the preservation of buildings from the Ming and Quing dynasties. The area will cover more than 440,000 sq metres. Phase one of the development, which has a total developable area of 350,000 sq metres, consists of nine residential blocks, one office building, a shopping arcade and other public facilities. Mr Chow said prices had not been finalised, but the present market level was about 5,000 to 6,000 yuan per sq metre. The joint venture invested paid-up capital of US$18 million, out of which about 100 million yuan had been used to cover land costs and construction expenses.