A CONSULTANCY arm of China's State Commission for Restructuring Economic Systems plans to form a joint venture with a United States insurance firm to provide services to small enterprises. International Consulting and Service Centre director Ye Sen said: 'The venture aims to provide clients with consultancy services and introduce them potential partners.' He said the centre was discussing the joint venture with American Fidelity International Holdings. It is intended that the joint venture establish an office in Beijing next year and then in the US. Mr Ye said the venture would help attract China's small to medium-sized enterprises to invest in the US and companies in the US to invest on the mainland. The centre was formed in 1993 against a backdrop of a flood of foreign capital into China. The State Economic and Trade Commission and the State Planning Commission and Citic have also founded business consultancy firms to tap unexplored markets. The centre, with the Institute for International Research, will hold a three-day conference on China's state enterprise reforms in Beijing next month. 'Many foreign investors are interested in investing in China, due to the country's fast economic growth,' said Mr Ye. 'However, the investors, especially the small to medium-sized enterprises in the US and Europe, are not familiar with the mainland's situation. China has amassed direct foreign investment of US$120 billion and 224,000 foreign-invested enterprises since its economic reforms in 1979. Chinese authorities want to create a level playing field for domestic and foreign enterprises by gradually eliminating tax incentives enjoyed by overseas companies. Mr Ye admitted the cancellation of the preferential policies would deal a blow to foreign investment in the short term. 'In the long term, China's enormous market potential and its fast economic growth will be more attractive than the privileges being offered.'