A 56-kilometer railway linking Hulin, a city in northernmost Heilongjiang Province, and Lesozavodsk in far eastern Russia, will become the first cross-border railway to be funded partly by Chinese private capital.

　　The Xinrong Investment Co Ltd, based in Dalian, a coastal city of northeastern Liaoning Province, will invest approximately 230 million yuan (US$27.81 million) in the railway project, while its Russian counterpart, Evrazholding, a privately run steel giant, will provide some US$30 million. Construction on the railway is scheduled to begin at the end of this month.

　　"The railway is expected to ease the transportation tensions that hinder Sino-Russian trade. It is also a significant signal in Sino-Russian trade and economic cooperation," said Song Kui, head of the Northeast Asia Research Institute under the Heilongjiang Provincial Academy of Social Sciences.

　　"It is the first time that Chinese private capital will be funding the construction of a cross-border rail route, a sector which has long been monopolized by the state economy," Song said.

　　According to an agreement signed recently, the Chinese company will be responsible for building a 36km section of the railway from Hulin to the Sino-Russian border. Its Russian counterpart will build a 20km section from Lesozavodsk to the border, where the two sides will jointly build a bridge spanning the 40-meter-wide Song'acha River to link the railway together.

　　The State Council, or the central government, issued a circular early this year supporting non-state investment in infrastructure, monopolized industries and public utilities. This was the first time that the government made a clear statement giving the green light for non-state capital to enter industries monopolized by the state economy.

　　Encouraged and supported by government policies, private businesses have begun investing in some fields in the Sino-Russian trade formerly monopolized by the state economy, such as the Dongning International Helicopter Airport, which is being built with private funds in the province.

　　Both China and Russia have exerted great efforts to explore more channels to promote bilateral trade and economic cooperation as well as exchanges in other fields. However, due to financial difficulties, some plans have not been implemented and lack of traffic facilities have created a bottleneck slowing the trade between the two countries.

　　The entry of private capital will undoubtedly help ease the traffic tension, Song said.

　　Heilongjiang Governor Zhang Zuoji said the provincial government will encourage and support private companies to participate in the monopolized sectors.

　　In fact, private businesses have been active in Sino-Russian trade in the border areas since the 1990s.

　　In 2004, trade volume between Heilongjiang and Russia hit US$3.82 billion, accounting for 18.8 percent of the overall trade between the two nations.

　　(Xinhua)