BEIJING -- China could use its own funds to build a
4,200-kilometer (2,600-mile) gas pipeline from the western Xinjiang region
to the eastern port of Shanghai if no foreign investors come forward,
officials said Tuesday.

"We can do it ourselves but we also invite foreign investment," said Zhang
Zhou, vice governor of the Xinjiang Uighur Autonomous Region.

Zhou, speaking after a press conference to encourage foreign investment in
Xinjiang, said the decision on whether to build the pipeline if no
foreigners come forward will be made by the central government.

Xinjiang officials said up to now no foreign companies have committed to
bidding for the project but they said several firms have carried out
inspections and fact finding tours.

Companies that have looked into the project came from Europe, Japan and
South Korea, Zhou said. He declined to name them.

China has said it will allow foreigners to hold dominant stakes in projects
related to the building the 120 billion yuan (14.5 billion dollar) pipeline,
with no limits on the equity foreign partners can hold and no restrictions
on the forms of cooperation.

This means foreign enterprises may be able to play a role all the way from
exploration in the deserts of Xinjiang to distribution in the population
centers along the east coast.

The pipeline is expected to carry 12 billion cubic meters of gas a year to
Shanghai from the Tarim Basin in Xinjiang and from Changqing in northern
Shaanxi province.

Work on the project is due to begin next year and the pipeline is expected
to be completed in 2004 and reach full capacity the year after.

Xinjiang officials on Tuesday refused to answer questions about a recent
explosion in the Xinjiang capital of Urumqi, which killed 60 people and
wounded up to 200 others.

China said a lorry carrying explosives blew up as it made its way along a
bumpy road. Nearby residents have told AFP the lorry was a military vehicle
but the government has declined to confirm or deny that detail.

Responding to a question on why the government has not publicly stated
whether it was a military vehicle, a member of Zhou's staff said: "It's only
a small matter."