"The group is preparing to publish an English newspaper in Shanghai," said editor-in-chief of the group's Xinmin Evening News Jin Fuan.

"We have the ability and we have the standards to publish an English newspaper," Jin told in a recent interview.

The Shanghai-based newspaper group was formed in July, when the popular Xinmin Evening News and the staid Wenhui daily merged as part of a government drive towards consolidation in the industry.

Jin said the group would apply to the central government to publish the English newspaper, but declined to say when or how frequently it would be printed.

Industry sources said the newspaper would be launched before the end of 1999.

The group originally aimed to absorb the city's main state-backed English language paper, the Shanghai Star, butopposition from Shanghai Star's parent -- the Beijing-based China Daily newspaper -- scuttled those plans, they have said.

Shanghai has seen a brief flowering of unofficial English language publications published by foreigners, including veteran Shanghai Talk as well as newcomers Buzz and magazine Ish.

Authorities had recently threatened to close down these publications and the three were scrambling to find local partners to get back into print, the editor of one of them said.

Shanghai's rapid development has brought more foreigners to the eastern city and encouraged more local residents to learn English or work at foreign companies, stimulating demand for such publications.

Jin said the group was also considering adding a weekly magazine to its stable of publications, which included the two flagship dailies and eight other magazines and newspapers.

The Xinmin Evening News now had the second highest daily circulation in China at 1.8 million, behind only theCommunist Party mouthpiece, the People's Daily, he said.

The newspaper's advertising revenues were 610 million yuan($74 million) in 1997 while net profits were 320 million yuan, he said.

The editor-in-chief of the group's Xinmin Evening News Jin FuaJin said the Evening News had built its circulation by presenting social and lifestyle news in a short, easy-to-read format with less emphasis on government propaganda than the city's other newspapers.

The group's other major newspaper, the Wenhui daily, currently had a daily circulation of around 5,00,000.

The Wenhui Xinmin group would also consider listing shares some time in the future, Jin said without giving further details, according to the sources.