Despite the handicaps, officials are still optimistic about China's chance to become a great world shipbuilder.

The Plan sets forth clear aims for the shipbuilding industry: improve the capacity to design ships and marine equipment, improve the infrastructure for building heavy ships, improve innovation capabilities.

"This is very important for the growth of China's shipbuilding industry," said He Rongguang, chairman and general manager of Bohai Shipbuilding Heavy Industry Corporation, one of the country's leading shipbuilding companies.

"We want to learn advanced foreign technology and management skills and will adjust overseas involvement in the sector to ensure sustained development," said Zhang Xiangmu.

To sharpen the competitive edge of its shipbuilding industry, China hopes to introduce foreign investment through equity-for-technology and market-for-technology deals.

Under the Plan, foreign shipbuilders are allowed to reorganize, acquire or jointly fund shipbuilding enterprises, medium- and low-speed ship diesel engine manufacturing enterprises and crankshaft manufacturing enterprises in China, provided they hold no more than 49 percent of the shares.

Sino-foreign joint ventures must set up a technical center to digest and absorb technologies transferred by foreign investors, said the Plan.

According to the Plan, the reorganization, merger and acquisition of domestic shipbuilding enterprises and medium- and low-speed ship diesel engine manufacturing enterprises by overseas enterprises, overseas-funded enterprises in China, and foreign-controlled joint ventures are treated as newly-created joint ventures.

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