Shanghai Waigaoqiao Shipbuilding Co Ltd, the country's largest shipyard, will begin its second-phase construction next year to create a yard that will have an annual capacity to build ships with a combined dead-weight tonnage of 2.6 million tons by 2010.The company, also China's most technically advanced shipyard, will spend around 1 billion yuan (US mil-lion) on the second phase. It will cover an area of 640,000 square meters along the Yangtze River in Shanghai, officials revealed at a ceremony celebrating its completion of the first phase, which included two docks, on Saturday.

　　"The central government hopes that we can start the second-phase construction as soon as possible since we've done a good job in the four-year construction of the first phase," said spokesman He Baoxin.

　　The second phase containing production facilities is expected to be finished within a year to one-and-a-half years although the date for construction to start hasn't been decided yet.

　　In 1999, construction work started on the two docks, costing 3.21 billion yuan and covering 1.46 million square meters in the northern part of the city along the Yangtze River.The shipyard began to produce ships from late 2001 when one of the docks was completed.

　　It has so far delivered three ships. Its first ship completed was a 175,000 DWT bulk carrier.

　　Another focus of the shipyard is construction of floating production storage units, which are used for storing crude oil on the seas, in line with the country's rising demand for oil exploitation.

　　Currently, another 10 ships are under construction and it has received orders for building ships with a total 4-million-ton DWT.

　　Boasting advanced technology and deeper waters, Waigaoqiao focuses on building large ships which other local shipbuilders are unable to produce due to their limited water depth.

　　Besides Waigaoqiao, other local shipbuilders will also stepsintosa new era when they move their facilities to Changxing Island.Jiangnan Shipyard, the country's oldest shipbuilder at 100 years old, will move to the island by 2007 and will focus on building naval ships and cruise liners.

　　With the city's two other shipbuilders setting up docks in Changxing, the island is expected to become the world's largest shipbuilding hub with a combined annual capacity to build ships up to 8 million DWT, industry insiders say.