BEIJING, April 16 -- The Airport Authority Hong Kong (AAHK) has agreed to invest 1.99 billion yuan (US$239.7 million) in Hangzhou Xiaoshan International Airport.

The two sides signed an agreement in Hangzhou, capital of East China's Zhejiang Province, on Friday.

It was the first time a mainland airport has been opened to Honk Kong investors.

Following the investment, Hangzhou Xiaoshan International Airport Co Ltd(HXIA) became a joint venture from a State-owned company, said Chen Haimei, chairman of HXIA, at the signing ceremony.

HXIA owns a 65 per cent stake of the new airport, with the rest going to AAHK.

"It will be a chance for us to get in line with international standards in terms of airport operations, construction and services," said Chen.

The strategic alliance will allow the two sides to further develop and enhance business co-operation in the Yangtze River Delta and the Pearl River Delta since the two cities both play significant roles in the economic development of the two regions, said Victor Fung, chairman of AAHK.

"This joint venture is a major milestone for AAHK's initiative to foster strategic alliances with mainland airports," said David Pang, chief executive officer of AAHK."We are very pleased to share with HXIA our management experience in areas such as operation, services, safety, security and retail planning and management."

HXIA had been in talks with several international airports on investment plans, and AAHK emerged as the best partner due to its exceptional airport management experience, Chen said.

With an average annual growth of 29 per cent since 2001, HXIA is facing the challenge of improving efficiency to ensure sustainable growth.

(Source: China Daily)