HONG KONG has rejected an appeal from China's state-owned arms dealer for the return of a $5.7 million armoured troop carrier seized by Customs officers. Tung Chee-hwa has personally knocked back a petition from North China Industries (Norinco) seeking release of the vehicle, found on a ship without appropriate licences for carrying military equipment. The camouflaged armoured personnel carrier, which was armed with a machinegun and smoke canisters, would instead be used for training local police, a Trade and Industry Bureau spokesman said. The petition, believed to have been the first of its kind seeking the return of seized military equipment, has been viewed as a test case of the SAR Government's independence in the face of a request from the powerful state-run enterprise. 'This is Hong Kong yet again moving to exercise its independent position,' said defence analyst Andrew Yang Nien-dzu, referring also to the landmark court ruling granting right of abode to mainland children of Hong Kong residents. 'Beijing is trying to use different cases to test the waters,' said Mr Yang, of the Chinese Council of Advanced Policy Studies in Taiwan. Military experts praised Norinco for following established procedures in seeking the return of its seized vehicle. 'This is good news for the international community, particularly given the concerns about the potential for arms proliferation in Hong Kong under Chinese rule,' said a defence expert. No reason was given for the decision to reject the petition, said Norinco's solicitors, Yung, Yu, Yuen and Co. The Sunday Morning Post revealed Norinco filed the petition in January last year after the troop carrier was found being shipped through the SAR without a licence. The six-wheel WZ551 carrier, which can transport nine PLA soldiers and three crew, was being returned to the military equipment maker in Guangdong from Thailand in August 1997, where it had featured in a military display. The Thai army had been testing the vehicle and was considering buying 295 of the carriers to deploy on its border with Cambodia. The carrier was seized from the Wing Son, owned by the Waibert Steamship Company. The firm was fined $100,000 in court and the captain $11,000. The shipping company is a subsidiary of mainland-financed Chu Kong Shipping. The carrier is likely to be deployed at the police tactical unit base in Fanling, which has five British-made Saxon carriers. It will give police an opportunity to become familiar with similar carriers used by PLA forces based in Hong Kong.