Updated from 10:18 a.m. EDT

FedEx

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plans to build a large cargo hub in mainland China, matching a similar push by rival

UPS

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to better tap that country's roaring export-driven economy.

The Memphis, Tenn., company will open its hub in December 2008 in the southern Chinese city of Guangzhou, replacing its existing Asia Pacific hub at Subic Bay in the Philippines.

Shares gained 31 cents to $83.01.

The announcement fulfills expectations that FedEx was preparing to hatch plans for a large base in China. It also comes a week after UPS announced it would open its first cargo hub in the country in 2007, in the eastern city of Shanghai.

"More than two decades ago, we envisioned China as a nexus of global supply and demand and as a result became the first express carrier to enter the market," said Frederick W. Smith, FedEx's chairman and CEO. "Today, with the announcement of our planned Guangzhou hub -- the largest in Asia Pacific -- we further invest in our leadership position by creating a new gateway that expands our customers' access to the global marketplace."

FedEx says it will invest $150 million in the China hub, which will sit on a 155-acre site at Guangzhou's Baiyun International Airport and employ 1,200 people.

Western shippers are beefing up their China operations at a quick pace. FedEx, which employs about 2,500 people at its Shanghai headquarters, currently provides express shipping to and from China on 23 weekly flights and plans to add another three weekly flights next year. The company doesn't break out revenue or profits from its China business but says the country is its fastest-growing market in Asia.

FedEx has yet to make express shipments between Chinese addresses. But it may have to follow the lead of UPS, which last week announced it would roll out domestic express service to business customers in many parts of China by September. Atlanta-based UPS now makes 18 flights a week to China and plans to add three more a day in 2006.