By 2005, power generated by wind will have increased by up to 1.6 megawatts, a five-year development plan estimates.

New plants will be built in Xinjiang Uygur Autonomous Region, Inner Mongolia Autonomous Region, Jiling, Guangdong and Hebei provinces, Shanghai Municipality, as well as an unspecific location on the sea.

Li Kejun, president of the non-official China Classification Society, said the central government had promised to issue preferential policies to accelerate the development of the industry in an effort to reduce the pollution caused by more traditional electricity sources, such as coal-fired electricity generators.

"Wind power is a bit more expensive than electricity from more traditional sources, so the government will subsidize wind generator operators with tax rebates until the industry makes profits," Li said.

High costs is one of the major factors holding wind power back from becoming a competitive option in China's power networks.

One official from the State Development Planning Commission suggested State policy should provide 15-year preferential loans for the project.

"If 70 per cent of the total funds invested in the project were provided by 15-year loans, the average cost of power would go down by 0.1 yuan (1.2 US cent) per kilowatt hour," the official said.

Li said wind power was of special significance for eastern coastal provinces - windy areas that had long suffered from power shortages.

China's potential wind resources abound in eastern coastal regions and western Gansu Province, Xinjiang and Inner Mongolia.

The official said the growth of the wind power industry was providing good opportunities for foreign investors.

He said that for the first time, the central government would invite international tendering for a pilot 100,000-kilowatt wind power project in a bid to spur on the development of the industry.

The winning investor will be given the chance to establish a joint venture or a single ownership wind farm.

Wind farms are estimated to be worth up to US$2 million.

China currently has some 20 enterprises engaged in manufacturing wind turbine generator systems, seven of them joint ventures.

China began looking into wind as a power source 20 years ago. In its embryonic stage, the industry was dominated by small wind-power generators that provided power to individual households.