Both domestic and overseas investors can vie for contracts in urban road construction, water supply, gas and heating systems and waste treatment, the sectors currently operated mainly by state-owned enterprises, he said.

"With regard to non-profitable sectors, such as environmental protection and sanitation, we are going to organize a bidding process to attract better-suited operators," said Qiu, adding that China's future urbanization requires a market-oriented approach.

The ministry and the Agricultural Bank of China had concluded a 30 billion yuan (US$3.6 billion) agreement recently to speed up urban infrastructure development.

China has undergone a rapid urbanization in recent years, hitting 37.7 percent of the population by the end of 2001, 7 percentage points higher than that in 1998, said the paper.

China has 662 cities and 20,358 towns, with a total urban population of 481 million.

(Xinhua News Agency February 13, 2003)