The company, with a total investment of US$25 million, was set up by the Taiwan-based China Prosper Investment Guarantee Co.

The establishment of the company is the first step made by Jiangsu to open its financial intermediary service sector to outside investors.

China is gradually lifting its ban on overseas investment in the domestic financial market following its entry to the World Trade Organization.

The company will provide financial guarantees for loans, leaseholds, projects and commercial contracts with its own funds, as well as consulting services in enterprise management and fiscal programming.

With its advantages in investment experience and worldwide business networks, the company will fill the gap caused by rules preventing overseas companies from establishing credit before Chinese banks.

The entry into the market of the overseas-invested bonding company will play an important role in promoting the development of the province's bonding industry, improving the efficiency of financial services and meeting enterprise demands in financing, industry experts said.

Experts added that government approval of this company symbolizes a shift of focus by Jiangsu Province on using overseas investment. Money will now be directed primarily to the service sector.

Since the beginning of this year, Changzhou Xinbei District, the high-tech development zone, has sought to attract overseas investment to its tertiary industries to create a better service environment.

(China Daily August 20, 2002)