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China's first law on ports will come into effect on Thursday, in a marked step to upgrade the construction, management and competitiveness of the country's sea and river ports.

The law gives clear guidelines to encourage overseas and domestic investors to invest in ports construction and management, and undertakes to protect investors' legal rights and interests.

The Chinese government opened its ports to overseas investment in March 2002, and the new legislation opens the door even wider.

To meet the demand of economic development, more overseas investment in ports construction was needed, and the new law would "surely encourage investment", said an official with the Ministry of Communications.

Under the law, the government will merely supervise and coordinate, and companies will run ports in accordance with market principles in a transparent and unbiased manner.

There are 1,467 ports in China: 165 sea ports and 1,302 river ports. Of these, 55 were built with foreign funds.

Since China set up its first container cargo joint venture in 1987, over 180 port facility joint ventures have been set up, involving a total investment of over 20 billion yuan (2.42 billion US dollars), with 11 billion yuan from overseas investors.

China's ports handle nine percent of domestic cargo transport and 85 percent of foreign trade.

In 2003, the total investment in ports reached 18 billion yuan (2.2 billion dollars), and nearly 50 million TEUs have been handled at sea and river ports across the country.

The Ministry of Communications forecast that in 2004, the total investment in China's ports would hit 30 billion yuan (3.6 billion dollars).

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