A new regulation governing China's auction industry and foreign investment in the sector will take effect from January 1, 2005.

China's Ministry of Commerce, the supervisor of the industry, published the new regulation on its website yesterday.

The website reported the new regulation is to guide auction activities in the country, promote the opening up of the sector and boost the industry's healthy development.

"The new regulation will be a complement to China's Auction Law," Wang Fenghai, deputy secretary-general of China's Association of Auctioneers, told China Daily in an earlier interview.

The country implemented its Auction Law in 1997, and no specific rules governing the sector have been made thereafter.

The newly issued regulation requires auction firms have a minimum registered capital of 1 million yuan (US$120,000) and three qualified employees including one auctioneer.

If a new auction company or branch has not held any auctions in six consecutive months, the ministry will take back its qualification for auction business.

The new regulation also states that China's auction sector will open to foreign investors, according to its commitment to the WTO.

In the new regulation, the ministry encourages the entry of foreign auction firms which have strong capital strength, advanced technologies, management experience and extensive international operating networks. It requires that foreign investors, who apply for the establishment of auction firms, observe the new rule, as well as the country's related requirement on foreign company's registered capital and investment values.

China Daily