Singapore's Changi Airports International made its first investment in China after it bought a 29 percent stake in Nanjing Lukou International Airport, Changi said in a statement.

The Singaporean firm paid US$138 million for the stake in the airport in Nanjing, capital of Jiangsu Province.

"We consider this investment to be a milestone in the aviation industry because it represents the first private-equity investment deal in a Chinese airport by a foreign airport," Chow Kok Fong, Chief Executive Officer of Changi Airports International, said in a statement.

The 10-year-old Nanjing airport handled 6.27 million passengers last year, up 16.4 percent from 2005.

It is China's fifth largest cargo airport and 15th biggest passenger airport.

Changi will also introduce best practices to help develop it into an even better airport, the Singaporean firm said in the statement.

The Nanjing deal is the third major airport project secured by Changi Airports in the past six months.

In August 2006, it signed an agreement to manage the New Terminal 1 of Sheremetyevo Airport in Moscow under a joint venture with the Sheremetyevo Airport Joint Stock Company.

Changi Airports also agreed in December to manage Abu Dhabi International Airport.

China is encouraging overseas funds to invest in the nation's small- and medium-sized airports to help meet the explosive air travel demand in the world's second biggest aviation market.

In December, Hangzhou Xiaoshan International Airport became the first mainland civil airport with direct overseas investment. A joint venture was signed with the Airport Authority Hong Kong.

The Hong Kong airport authority said it will invest 1.99 billion yuan (US$254.4 million) for a 35 percent stake.