A Chinese state-holding company signed a contract Wednesday to develop satellite-natigating positioning technology for the European Galileo Project.

China Galileo Industries Ltd., a state company owned by China Aerospace Science and Technology Corporation, China Electronics Technology Group Corporation, China Satcom and China Academy of Space Technology, is authorized by the National Remote Sensing Center of China (NRSCC), the European Union-designated Chinese partner on the Galileo Project, to develop Galileo's satellite and remote sensing technologies and application systems.

The Chinese firm consists of four companies, China Aerospace Science and Industry Corporation, China Electronics Technology Group Corporation, China Satcom and the Chinese Academy of Space Technology.

Under the agreement, signed by China Galileo and the National Remote Sensing Centre of China, the four Chinese firms will help promote co-operation with the European Union (EU) in commercializing the civilian use of the Galileo system in China. They will also build an intelligent transport system based on accurate navigation information provided by Galileo, according to Yin Xingliang, manager of China Aerospace Science and Industry Corporation.

"Today's agreement is a further step to the one that was reached late last year between China and the EU," said Zhang Guocheng, director of the National Remote Sensing Centre of China, at yesterday's signing ceremony.

Following the agreement, China Galileo Industries Ltd will mobilize domestic companies specializing in space, electronics and satellite technology to get them to develop the civilian use of the Galileo satellite navigation system in China, said Meng Bo, chairman of the board of the company.

The company is also expected to conduct more collaborations with European Galileo Industries on future programmes, according to Meng.

Meng said, "GPS is mainly for military use as well as for a little portion of civilian use." Still a dual-purpose platform for global positioning, Meng said, the Galileo system will provide data mainly for civilian use in accordance with subscription contracts.

The Galileo Project is a global satellite navigation system developed by the EU, and will affect ordinary people's lives, an EU official said in a recent interview.

"The Galileo Project will change the life of everybody, because everyone will be able to know where they are on earth," said Jurgen Sanders, a project spokesman.

"Imagine you have an accident in your car, the system will give you a signal automatically, telling you your position, your emergency and thus it may help you avoid major problems," said Sanders. The system will also make air traffic control more efficient. These are only parts of the system's functions, according to Sanders.

Although the satellite navigation system is still at the development phase, Sanders said these kind of functions will be "technically possible" in the near future. The system is expected to become operational in 2008.

According to a cooperation agreement signed by the NRSCC and the Galileo Joint Undertaking in last October, China pledged to invest in research and development on space technologies, ground equipment and application systems for the Galileo Project.

The European Union and the European Space Agency kicked off the Galileo Project in March 2002 to develop a satellite-navigation system independent of the US military-monopolied global positioning system (GPS).

With an investment of roughly 3.5 billion euros, the project will launch 30 navigation satellites, which will provide remote sensing data with resolution up to one meter. At present, the data resolution of GPS is only ten meters.

Chinese contractors said that the first navigation satellite for the project could be launched later this year.

As the first non-EU partner for the project, China agreed to invest 200 million euros. In the first phase of the Chinese-European cooperation, China will spend 70 million euros. Aside from the five million euros worth of entrance fee, China is allowed to develop technologies and equipment worth of 65 million euros.

The NRSCC, a coordination body under the Ministry of Science and Technology, is mandated to choose domestic research institutes and companies to undertake concerned research and development.

Li Jiahong, an NRSCC official, said, "the cooperation between China and Europe on the project will be helpful to China's independent research on its own satellite-navigating systems."

The EU estimated that by 2020, the Galileo Project will bring Europe tens of billions of euros in revenues and tens of thousands of job opportunities. Chinese experts expected revenues worth 260 billion yuan (23.6 billion euros) in Galileo systems applications by 2020.