More than 200 State-owned enterprises in northeast China's Liaoning Province have become members of the Shenyang Credit Center, and 18 of them have been able to pay their debts totaling 6.436 million yuan ( about US$772, 300) with letters of credit.

Zhang Xinxin of the center said that any member firm can mortgage their asset at the market price at the center and be issued a letter of credit with a value of half the enterprise's assets. These assets must exceeded 200 million yuan in value.

The Liaohe Oilfield on October 28 received a letter of credit to the amount of 1.5 million yuan from the Shenyang Bulb Factory both for paying off a 700,000 yuan debt and for buying raw materials.

Zhao Xiaoli, the woman in charge of the bulb factory's financial affairs, said that they have mortgaged assets worth five million yuan. "It is now possible for us to further develop our business, as we now don't have to worry about financial problems," she added.

The center's director said that the credit system is now limited only to enterprises.

Arrears among Chinese State-owned enterprises have always been a big problem to stem their development. Liaoning Province, long a major Chinese heavy industrial base, initiated this new scheme after eight years of study.