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The nation's civil aviation authority will implement further market reform while intensifying security supervision, a senior General Administration of Civil Aviation of China (CAAC) official said yesterday.

CAAC Director Yang Yuanyuan said it means the market will play a bigger role in the allocation of civil aviation resources.

Yang made the statement during a one-day national working conference on the civil aviation industry, which was held in Beijing.

Yang said that, in the coming year, the examination and approval procedures of domestic airline management will be streamlined so a fair and liberal administration system can be established in line with market demand.

Meanwhile, market access will be broadened and investors will be allowed to enter the sector by establishing new enterprises or using their shares in existing companies.

Both international and domestic capital will be encouraged to enter China's civil aviation industry, Yang added.

"Foreign capital is accessible to the civil aviation market in accordance with regulations overseeing the investment of foreign capital within the civil aviation industry," the director said.

"A policy is being mapped out on domestic capital, particularly that of private-owned enterprises, into the civil aviation industry so their rights and interests can be guaranteed."

Yang said that, while promoting the rapid development of the industry, the aviation authority has also emphasized its safe growth.

Airline companies should take full responsibility for security, but the government reserves the right to supervise their operations, he said.

Yang used yesterday's conference to urge airlines, plane manufacturers, airports and air-control departments to take precautions against problems that can frequently occur within the industry.

In the meantime, civil aviation management departments at all levels must strengthen air defences to protect against possible terrorist activities.

In the past year, the country's civil aviation industry achieved a revenue of 108.6 billion yuan (US$13 billion), up marginally over the previous year - although heavy losses were felt during April and June due to SARS.

Looking to 2004, Yang said passenger transport capacity is expected to total 103 million while cargo transport is forecast to reach 2.5 million tons, up 20 and 18 per cent respectively against this year's incomplete figures.

The total revenue of the industry is expected to increase 17 per cent to 127 billion yuan (US$15.3 billion), Yang added.

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