invest an additional $50 million in a cellular phone venture in China.

The companies share an 80 percent interest in the project in the coastal Chinese province of Shandong, Bell Canada spokesman Peter Burn said.

A 20 percent interest is held by China United Telecommunications Corp., or China Unicom, which was established by the Chinese government to be the country's second phone carrier.

The project will build on the partners' first Chinese venture, which built a cellular network in Shandong's capital city, Yantai. The first call was made yesterday on the $17 million Yantai system.

"Taking the second step of expansion is not only evidence of the potential of Shandong but a reflection of our satisfaction with our first step there,'' Burn said.

Bell Canada is a unit of Montreal-based BCE Inc., Canada's largest telecommunications company. American International Group is a New York-based insurance company that does business in China.

Burn said Shandong has the second-highest gross domestic product of any Chinese province. Its agrarian-based economy has a population of 87 million and a rapidly expanding industrial sector, he said.

The cellular phone system will be expanded to the cities of Jinan, Weifang and Zhibo, which with Yantai, have a combined population of 25 million people. -- Bloomberg