China to open up rail to foreign investment

China’s Ministry of Railways says the country’s domestic railway cargo transportation sector will be opening up, on a gradual basis, to foreign investors, reports the China Daily.

The plan is in line with China’s promise to open up its markets to foreign companies after it becomes a Word Trade Organization member.

The ministry says it will let go of its monopoly over China’s rail cargo transportation in stages over the next five years. In the first stage, from 2002 to 2003, foreign companies will be allowed to form joint ventures with Chinese companies holding majority stakes. From 2004 to 2006, foreign companies will be allowed to hold major shares in rail cargo transportation joint ventures and, finally, in 2006 the market will be open for foreign companies to compete evenly.

Railway transportation for passengers, however, would remain under state control, with the cargo and passenger rail sector separated in preparation for market reform.