YIP'S Hang Cheung (Holdings), a maker and distributor of solvents and paints, is planning a joint venture with Chinese and overseas partners to manufacture new products in China. Chairman and managing director Tony Ip Chi-shing said the joint venture, which called for an investment of about US$4 million, would be finalised in the first half of the year. The group had already secured a mainland partner, but was still selecting a suitable overseas partner from among several US, French and German companies, he said. The venture would employ mainly overseas technology and utilise the cheap land and facilities in China, enabling Yip's Hang Cheung to branch out. Mr Ip declined to give details, but said the new products would complement the group's existing businesses. He also said Yip's Hang Cheung was negotiating with mainland partners to set up manufacturing joint ventures in China. These manufacturing ventures would act as sub-contractors, purchasing raw materials from Yip's Hang Cheung, then selling the products back to Yip's Hang Cheung for further processing. Mr Ip said these ventures could enhance the trading business of Yip's Hang Cheung. Through such arrangements, the group would avoid losses arising from the conversion of renminbi into Hongkong dollars, he said. The depreciating renminbi had a negative effect on the group's trading business in China, which reported a slight loss in the first half of this financial year, Mr Ip said. But he added that trading accounted for only six per cent of the group's total turnover, and would have a minimal impact on the company's performance. Currently, about eight per cent of products manufactured by Yip's Hang Cheung are sold in China. Mr Ip said the falling renminbi did have one positive effect; it cut the operating costs of Yip's Hang Cheung's manufacturing facilities in China.