China clears Hutchison

China clears Hutchison

HONG KONG (Reuters): China has cleared Hutchison Whampoa Ltd
to take a majority stake in a port project despite the country's
policy of barring foreign investors from controlling domestic
container operations.

China's cabinet has allowed the world's largest container port
operator to take a 65 percent stake in phase three of the Yantian
container port in Shenzhen, officials at Hutchison's China
partner Yantian Harbour Group said on Wednesday.

Yantian Harbour would hold the remaining 35 percent, the
officials told Reuters by telephone from the southern Chinese
city.

Phase three will require a total investment of 5.57 billion
yuan (US$673 million) and would have four berths capable of
handling 1.6 million twenty-foot equivalent units (TEUs)
annually, the Shenzhen-based Securities Times daily said.

Chinese port officials said earlier this year that foreign
investors were no longer allowed to hold controlling stakes in
domestic container ports.

A Yantian official said Beijing probably approved the deal
because Hutchison already holds 50.5 percent of the first two
phases of the container port, in which Hutchison and Yantian
Harbour Group's subsidiary Yantian Harbour Co Ltd [0088.SZ] had
sunk HK$7 billion (US$897 million).