China's financial hub is a step closer to becoming Northeast Asia's leading shipping centre as construction of the Yangshan Deep-water Port proceeds on schedule.

The project's first phase, which includes construction of Donghai Bridge linking the East China Sea port with Shanghai, has already cost 3.5 billion yuan (US$423 million).

Construction began in June 2002. The project is expected to cost 14.31 billion yuan (US$1.73 billion).

Transforming Shanghai into an international shipping hub is a strategic decision by the central government, and is strategically important to the city.

To compete with South Korea and China's Taiwan Province, which handle large volumes of shipping containers from northern and northeastern China, Shanghai is constructing the port to improve its edge.

Construction began last summer after six years of feasibility studies and preparations, which involved brainstorming sessions attended by 900 world-renowned experts and scholars.

"Despite so many negative natural factors, construction of both the port and the bridge are progressing," said Zhang Huimin, head of Shanghai Deep-water Port Construction.

Both the port and the bridge should be in operations before 2006, he said.

The deep-water port is located in East China Sea, at the mouth of Hangzhou Bay, about 27 kilometres from Luchaogang of Nanhui District in Pudong New Area, and 68 kilometres from the international shipping route.

A 10-kilometre quay line, capable of accommodating more than 30 large container ships, will also be constructed around the Dayangshan and Xiaoyangshan islands.

The quay line, to be ready by 2020, could raise Shanghai's annual TEU (20-foot equivalent units) handling capacity by 20 million containers.

An additional 10 kilometres of quay line - capable of accommodating another 20 ships - could be constructed after 2020, following a reassessment of the project, Zhang said.

The first five berths, along a 1,600-metre stretch of quay line between Xiaoyangshan and Huogaitang, can accommodate extra large container ships, with 8,000 TEUs, and add 3 million TEUs per year to the city.

Xiaoyangshai and Huogaitang are islands in the Qiqu archipelago under Zhejiang Province's administration.

Another four berths will be completed in 2006, which will enhance Shanghai's competitiveness, said Gui Mo, port branch director.

By the end of June, 1,618 columns, or 57.4 per cent of the total, which will support the port, had been put in place, Gui said.

The 2.3-kilometre area of land at the base of Donghai Bridge has been paved, and 2,245 columns were placed, said bridge project Director Huang Rong.

The 31-kilometre bridge will be China's longest spanning the sea, and the nation's first bridge expected to last more than 100 years, Huang said.

Shanghai, its neighbouring provinces and regions along the Yangtze River have been developing steadily in the past 10 years, and the volume of containers passing through Shanghai has grown correspondingly.

Shanghai, with 25 berths along the Yangtze River, which is about 9 metres deep, and the very narrow Huangpu River, is capable of handling 6.45 million TEUs annually.

To meet demand, which grows on average 30 per cent a year, it is crucial that Shanghai build a deep-waterport that is at least 15 metres deep.

Shanghai's port last year handled 8.613 million TEUs. In this year's first six months, the port has handled 5.2 million TEUs.

"It looks very promising that the figure this year will exceed 10 million, which will help Shanghai become the world's third-largest port," Zhang said.

"Thus, it is urgent that we get the deep-water port operational."

Foreseeing the great prospects of Shanghai, which is to become an international centre for trade, finance and shipping, as expected by the State Council, many port construction and operation companies from around the world have expressed their desires to participate in this huge project, said officials with Shanghai Tongsheng Corp, which is responsible for financing construction of the port and bridge.

"We are studying related policies to select the best partners, but we won't require them to be either foreign or domestic," Gu said.