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Law firm in $50m China deal

A SMALL firm of City lawyers is showing merchant banks and larger rivals a clean pair of heels by raising $50m (pounds 32.6m) for a Chinese port development under its own steam.

In a highly unusual move, Holborn Circus-based solicitors Rosenblatts have been asked to raise the money by Quanwan United Industrial Corp for the first phase of expansion at Huizhou harbour, 47 miles north of Hong Kong.

"They do not have the sophisticated facilities we have in the west, like having a merchant bank on tap to minister to their needs. The Chinese deal with people they already trust," said China specialist Neil Sampson, one of Rosenblatts' five partners.

The project, one of two port developments north of the colony, is needed to cope with the heady pace of expansion in Guangdong, the Chinese province bordering Hong Kong.

Shell is planning a petrol and gas storage facility at Huizhou and Honda a car-making joint venture, which should be up and running by 2000.

Quanwan is a 60-40 joint venture between the local authority and China Everbright, one of the country's largest industrial concerns.

Usually a law firm would pass the brief on to a merchant bank, but Mr Sampson - who has dealt with the Chinese for the last 10 years - is now approaching banks, institutions and the European Union for money direct.

The Kuwait Investment Office has already provided funds to dredge the port. Rosenblatts reports wide interest, despite current tension over Taiwan.

"We have two banks, one UK and one Japanese, very interested at the moment," Mr Sampson said. "I would like to have a UK involvement because I think we take a very conservative view on investment in China, unlike our European partners. That's a shame."

The $50m loan will fund two new berths for 35,000 tonne ships, plus port infrastructure. Rosenblatts has introduced a firm of project engineers, LG Mouchel & Partners, to the Chinese.

The firm's clients also include Hong Kong New China Holdings, a joint venture between HK billionaire TT Tsui, 13 Chinese state authorities and 50 other institutions to develop business in China.

Sunlink, one of China's largest construction firms, is also a client. It is building a skyscraper in Shanghai for which it is seeking Western tenants and retail groups.