It is still a dream for individual Chinese to establish a private firm with a registered capital of only one yuan, but a new regulation published on January 17 has undoubtedly lowered the long-standing high threshold for Chinese investors.

The Procedures for the Registration of Individually-Funded Enterprises announced by the State Administration for Industry and Commerce does not specify the minimum sum of money individuals need to establish such enterprises.

The new regulation provides detailed rules for the implementation of the Law on Solely Individual-Invested Enterprises that took effect as of January 1, 2000.

"The new regulation has left out the need to produce a bank certificate when a person registers an enterprise. All one needs to do now is to declare the amount of investment," said Hu Xiugan,director of the self-employed economy supervision department. This means that the government has greatly relaxed the restrictions on the investment of private enterprises, he added.

Hu said that the regulation also abolishes the requirements for the minimum number of employees, and reduces restrictions on differentiating a self-employed businessmen and an enterprise owner according to the number of employees.

Economists say that lightening restrictions on individual investors will play an active role in spurring non-governmental investment, increasing job opportunities and increasing domestic consumer demand, and greatly promote the development of China's private sector.

"I once thought of opening a noodle restaurant two years ago, but because I did not have enough registration money, I gave up the idea," said Meng Dan, a young man working at a Beijing-based restaurant.

"Now the new regulation makes it possible, and I'll return home and open a noodle restaurant with my relatives," he said.

Wang Hailin, an official with the Small and Medium-Sized Enterprise Department under the State Economic and Trade Commission, pointed out that the Chinese government has attached increasing importance to the development of small and medium-sized enterprises in recent years in a bid to nurture the private sector.

China has put forward a number of favorable policies to support these enterprises and will introduce more, he said.

The inflow of individual capital in the domestic market will facilitate the establishment of a healthy and diversified investment environment and pave a way for huge overseas funds in the near future.

However, local law workers have cautioned individual investors should misunderstand the new regulation because it does not mean that one has to pay his debts only according to the amount of the registered capital of his firm when it goes bankrupt.

Latest official statistics show that by the end of 1999, there were 1.48 million registered private firms employing a work force of 19 million.