CHINA International Trust and Investment Corporation (CITIC) Pacific is switching its business focus due to troubled Sino-British relations. The company made its first major foray into the property market at last week's government land auction. And CITIC managing director Mr Henry Fan Hung-ling said there were more new moves to come. ''Originally, our company wanted to emphasise infrastructural projects in Hongkong, these projects are at a standstill, and so we have to change the strategy to diversify into other businesses,'' he said. Analysts see the new strategy as highly significant. Mr Fan said the move into property, in partnership with Swire Properties, was an attempt to capitalise on the property market that analysts say has been depressed by the political row. CITIC and Swire won the site at Yau Yat Tsuen on Wednesday. The move is regarded as diversification because CITIC has no experience in property development. ''The Yau Yat Tsuen site development is a good opportunity, and the price is attractive,'' said Mr Fan. Blue-chip CITIC Pacific has mainland backing that goes to the very top of the Chinese Government. CITIC Beijing, the ultimate parent of the hong, is under the control of China's State Council. Its founder and chairman, Mr Rong Yiren, was elected China's vice-president last week. The company has submitted three infrastructure projects to the Hongkong Government awaiting for approval. However, many projects have been held up until talks are resumed by the Joint Liaison Group. The three projects are Western Harbour Crossing, West/East New Territories and Southeast New Territories landfill projects. The two landfill projects were submitted by CITIC Pacific in May and October last year. While the Western Harbour project was submitted by a consortium including CITIC (HK) and CITIC Pacific in July last year. CITIC is joining combining with the British hong, Swire, at an extremely politically sensitive time. Mr Fan said he did not think the move would cause political trouble in Beijing. ''Since CITIC is a listed company, we are purely taking commercial matters into account,'' he said. He further explained that since CITIC lacked property development experience, Swire was a suitable partner. Both Citic and Swire have been tight-lipped about plans for the 222,384 square foot commercial site, although analysts are expecting a Taikoo Shing-style development. Swire Properties managing director Mr Keith Kerr said: ''We are happy to have them as a partner. We are already in business with them anyway. It is an extension of the existing relationship. ''Of course, we could have handled it completely ourselves but from our point of view it spreads the risk. It is a major investment that rises to $5 billion; if we put $5 billion capital into it that restricts us from doing other things.'' He added: ''It is the beginning of the third leg of out investment stool. We have Pacific Place, we have Hongkong east, now we have central Kowloon.'' Mr Lawrence Ang, associate director of SCBI Securities said: ''Swire is unable to get a stronger partner than CITIC. While CITIC has no experience in property development, they will not find a more suitable partner than Swire; the partnership is well-matched.'' The co-operation between Swire and CITIC begun when CITIC bought a Cathay Pacific shareholding in 1987, and Swire and Cathay together bought 35 per cent of Dragonair, and CITIC bought 38.3 per cent in 1990. Recently, aircraft maintenance firm HAECO, a Swire Pacific subsidiary, set up a joint venture with Xiamen Corp for International Technological Co-operation. ''Certainly, there are political implications in the partnership, if Swire has confidence in Hongkong's future, setting up a close relationship with a Chinese firm is a smart move,'' said Mr Adrian Ngan, associate director of Vickers Ballas.