Nearly three billion yuan of foreign funds was invested in China's railway sector in 2006, according to the Ministry of Railways (MOR).

This is the first time that the MOR has released details about the amount of foreign investment in the Chinese railway sector.

Analysts say that this reflects more open financial policies in the industry, as foreign investment made up less than two percent of the 155.3 billion yuan of investment in railway infrastructure in 2006.

The financing channels for railway construction in China have widened in recent years. Of the railway investment in 2006, no more than 60 billion yuan came from traditional sources such as treasury bills, bank loans and local government investments while a whopping 100 billion yuan was sourced from the stock market, private investment and a negligible amount of foreign investment.

China has boosted its railway transport capacity in the last two decades but still can not meet market demand, whether in terms of passenger or freight capacity.

The investment in railway infrastructure in 2007 would be 256 billion yuan, minister of railways Liu Zhijun said early this year.

Source: Xinhua