TWO of China's four state asset managers have opened securities subsidiaries to expand business after completing the clean-up of banks' sour debt.

China Huarong Asset Management Corp and China Cinda Asset Management Corp on Wednesday began operations of their securities units, the two companies said separately yesterday.

Huarong Securities Co has a registered capital of 1.51 billion yuan (US$201 million) with China Huarong Asset providing 1.5 billion yuan and China Gezhouba (Group) Corp contributing 10 million yuan.

Cinda Securities Co, which has a registered capital of 1.511 billion yuan, has received 1.5 billion yuan in funds from China Cinda Asset, nine million yuan from Zhonghai Trust & Investment Co and two million yuan from China National Materials Industry Group.

China created four asset management companies in 1999 - Great Wall, Cinda, Huarong and China Orient - to help clear up the balance sheets of the nation's four biggest banks.

All the AMCs cleared up billions of yuan worth of bad debts at the lenders in a government-directed campaign early this year and are on track to transform themselves into financial institutions for commercial operations.

China Orient Asset Management Corp has also won regulatory approval to set up a securities subsidiary. The new firm, called Dongxing Securities Co, will be based in Beijing with a registered capital of 1.504 billion yuan, it has said.

The stock market regulator may temporarily halt the approval process for new domestic brokerages after granting brokering licenses to the three AMCs, the Shanghai Securities News said early this month.