A joint venture to produce world-class subway engines went into construction today in the southwestern part of Shanghai, China's largest commercial city.

The Shanghai Alsthom Transport Electrical Equipment Co. Ltd. will be built with a total investment of 10 million US dollars, 60 percent of which will come from the French side.

After its completion in six months, the company will produce 168 sets of advanced locomotives each year, and will provide the mass transit Peal Line in Shanghai with key equipment, said Pierre Lenfent, president of the company.

Alsthom also works in cooperation with other Chinese companies to produce city railway facilities.

China has historically spent large sums to import equipment for subway projects in Shanghai and Guangzhou.

In addition to the four cities which now have subways -- Beijing, Tianjin, Shanghai and Guangzhou -- another ten cities including Shenzhen, Nanjing and Wuhan are planning to build train systems.

Shanghai plans to build 11 subways and seven light rails with a total length of over 460 kilometers, or four times of the current total length of subway lines in China.

"The Shanghai project is a landmark for Alsthom," said Lenfent, adding that the company will take part in the construction of subways in Shanghai and other Chinese cities.

In addition, the French government will provide more than 350 million US dollars in loans for the Peal Line in Shanghai. The first Sino-French-funded train will be used on the line this year.