China's mobile phone production capacity, already the world's biggest, was set to rise from 300 million handsets in 2004 to 500 million this year as some 40 new producers begin manufacturing, the top economic planning body said.

"Judging from developments in recent years, mobile phone production capacity has increased rapidly and the investment risk must not be overlooked," the National Development and Reform Commission said in a report on its Web site.

China produced some 240 million handsets in 2004, with 146 million sets exported. From 1999-2002, China's mobile phone industry sold some 300 million phones, earning some 350 billion yuan (US$42.3 billion) in sales and handing over 45.5 billion yuan in taxes, it said.

By 2003, mobile phone sales reached 180 million units with 95 million sets sold overseas, a number that made up 36 percent of mobile phone sales outside China, it said.

Since 1999, multinational corporations had poured some US$3.6 billion in investment into the sector, it said.

The number of mobile phone subscribers in China topped 334 million in 2004, up 65 million from 2003, the Ministry of Information Industry said last month.

China's mobile subscriber number was expected to grow to 402 million this year, domestic press reports said. Such number would mean nearly one in every three Chinese citizens would have a mobile phone.

Revenue in the telecommunication sector reached 520.5 billion yuan in 2004, up 1.07 percent from 515 billion yuan in 2003.

Source: Shenzhen Daily/Agencies