Jun. 22, 2007 (China Knowledge) – Companies in China are setting their sights on investment opportunities in increasingly profitable mainland shipping ports instead of overseas ones, with the inflow of foreign funding.

The injection of foreign investments is forecasted by analysts to be a continual one, given the hastening in its development over the last two decades.

According to James Jixian Wang, an associate professor with the University of Hong Kong, the consistently strong performance of the port industry serves as a strong attraction towards overseas investors. He added that the inflow of foreign suitors would not cease even though the more lucrative ports have already been snapped up by the early birds.

Peng Cuihong, counsel to the ministry's water transport department, told the sources that overseas investments are one of the government's key strategies employed to strengthen and expand domestic companies.

Besides, foreign investments have also heralded rapid development for domestic ports such as infrastructure upgrades, more efficient management of port operations and concepts. By the end of last year, China's coastal ports had about 15,000 productive berths, including 1,257 deep-water berths for 10,000-ton vessels.

Yet, China Ocean Shipping (Group) Company (COSCO) <1919> is believed to be the only one at present to acquire stakes in ports abroad, with berths in the United States and Italy. Yet, it marks the budding of a positive growth trend reflecting an optimistic outlook in the Chinese shipping sector.

The shipping industry was among the first few in mainland to open its doors to foreign capital. Most of China's ports have received foreign funds since Shanghai port first attracted the overseas capital in 1992.

Cargo and container movements last year increased by 17% and 22% respectively over the year 2005. The A.P. Moller-Maersk Group estimated China's container movements to surge by 14% until 2011, almost half of the average growth rate across the world.

According to a projection in the Ministry of Communications, the transit goods in China's ports look set to increase by 3.95 billion tons last year and are estimated to exceed 6 billion tons by 2020.