U.S.-China airline deal

U.S.-China airline deal

BEIJING (Reuter): The Chinese government has approved the
landmark purchase of 25 percent of a local airline by an American
company, Xinhua news agency said yesterday.

The Civil Aviation Administration of China (CAAC), the
aviation regulator, and the Ministry of Foreign Trade and
Economic Cooperation, have approved the purchase by American
Aviation Investment of part of Hainan Airlines, it said.

American Investment is a fund partially controlled by U.S.
financier George Soros.

It becomes China's first joint venture airline, with the U.S.
partner having paid US$25 million for its stake.

Set up as a local airline in October 1989, the airline was the
first stockholding airline company in China and one of the most
profitable, earning 44.78 million yuan ($5.4 million) in the
first half of 1995, Xinhua said.

The ministry and CAAC ruled that the injection of foreign
capital was legal, in line with national and local industrial
policy, and would help the airline study foreign management and
technology, it said.

Hainan, China's southernmost province, is the country's
largest special economic zone, permitting it to make experiments
that would not be allowed in other parts of the country.