AFTER six months of negotiations, the giant American personal computer manufacturer, Compaq, has appointed China's largest hi-tech firm - the Beijing Stone Group - as a primary distributor throughout China. Compaq's Hongkong-based China representatives said yesterday the Stone Group owned the largest distribution networks in China, with more than 100 outlets throughout the country. Stone's appointment sets the scene for an intense battle for market share in China between Compaq and the current market leader, AST Research. Both companies stepped up marketing activities in China last year, and both are in various stages of planning for setting up mainland manufacturing or assembly operations. Neither company will reveal the number of units each sells. However, it is believed that, last year, AST sold about 70,000 compared to Compaq's 45,000. Compaq has become increasingly aggressive in China since the launch of its low-priced ProLinea series. Last October, the company sponsored a US$1-million training centre at the Tsinghua University in Beijing. The company is currently recruiting staff for a Beijing representative office to be opened in July. It also plans to open a small trading office in Shenzhen. The Beijing Stone Group is Compaq's sixth distributor in China, but only the second that is fully owned by China interests. Compaq's largest China distributor is currently EEKON, a Hongkong-based computer trading firm. The Stone Group is one of China's largest private corporations, and announced last month its broad plans to list on the Hongkong Stock Exchange. The company has had its difficulties. In 1989, Stone became embroiled in the political turmoil that culminated in the June 4 Tiananmen Square incident in Beijing. A number of high profile Stone executives, including Wan Runnan, fled the country as political exiles.