The country's largest city will invest more than one billion yuanmillion dollars) in the research facility, the China News Service reported, quoting Yuan Jie, director of the Shanghai Aerospace Bureau.

The project has entered the initial stages and will be completed within three years, Yuan was quoted as saying.

China, which sent a man into space in late 2003, plans to repeat the feat on board spaceship Shenzhou-6 this autumn.

That will set the stage for the second phase of China's space program, consisting of the flights of Shenzhou-7 and Shenzhou-8, the China News Service said.

During these flights new experiments will be conducted with space walks and docking, according to the news service, which did not say when they were likely to take place.

Since China's space program was set up in 1992 it has grown to employ tens of thousands of scientific, manufacturing and planning personnel in more than 3,000 factories.

At a national conference on defense science and technology in Beijing over the weekend, the space program was described as a top priority for 2005, according to China News Service.

Not only will thousands of scientists and technicians be occupied with Shenzhou-6, they will also be busy preparing for the launch of an unmanned lunar orbiter expected to take off in 2007, the news service said.

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