RJP Electronics is discussing plans to invest in the development of port facilities in Weihai, Shandong.
Chairman Robert Li Shu-keung said the group was interested in developing Weihai's port, which needed better transportation facilities to cope with economic growth there.
But he added that talks were still at a preliminary stage, and the shareholding structure of the project had not been finalised.
According to Weihai officials, the city plans to upgrade the port facilities to an annual throughput capacity of 400,000 tonnes.
Mr Jiang Bo, managing director of China Merchants Holdings, said his group had also been invited to participate in the proposed development.
He said China Merchants might participate in the project together with RJP, but plans had yet to be finalised.
He also said the mainland conglomerate was negotiating with the Weihai municipal government for a possible investment in the Weihai power plant.
Weihai officials said the project would involve the installation of two 300,000 kilowatt generators, with an estimated investment of two billion yuan (about HK$2.7 billion at official rates).
They said China Merchants would possibly take a 25 per cent stake in the project.
Both Mr Jiang and Mr Li were speaking at a ceremony yesterday marking the formation of Howell (Hongkong) Co, the Hongkong commercial and investment arm of the Weihai municipal government.
Mr Li also revealed that RJP had signed a letter of intent to develop 200 acres of land for industrial and residential uses in Wehai's hi-tech development zone.