CHINA Strategic Investment has applied to float its China-based tyre-making business on the New York Stock Exchange through a US$85 million new issue. The move is likely to make China Strategic the second Hongkong-listed concern after CP Pokphand to list a mainland joint venture in New York. It also highlights the trend towards raising overseas capital through joint ventures on the mainland. The company said yesterday it was filing a registration statement with the US Securities and Exchange Commission to issue 6.1 million shares in China Tire Holdings. China Tire, incorporated in Bermuda and wholly owned by China Strategic, is China's second-biggest maker of vehicle tyres and the third biggest maker of bicycle tyres. If given SEC approval, the shares will be offered at US$13 to $15 each. China Tire holds a 55 per cent stake in Double Happiness Tyre Industries Corp and 51 per cent of Hangzhou Zhongce Rubber Co. Double Happiness, based in Taiyuan, northern China, makes bias tyres for trucks and tractors. The Taiyuan municipal government owns the other 45 per cent. Hangzhou Zhongce produces bias and radial tires for cars, trucks, tractors and bicycles. The two joint ventures between them made more than 1.8 million motor vehicle tyres and 12 million bicycle and wheelbarrow tyres in 1992 for both domestic and overseas use. After the flotation, China Strategic's interest in China Tire will be diluted to 33 per cent, but this holding will retain 83 per cent of the voting rights. Morgan Stanley, First Boston and Salomon Brothers are the underwriters for the offering. China Strategic has agreed to grant to the underwriters an option to buy up to an extra 915,000 shares to cover over-allotments. The company said the SEC was expected to decide on the application within the next month. Hongkong analysts expect to see more companies list their mainland-based businesses on overseas markets, considering the present gloom of the Shanghai and Shenzhen stock markets. CP Pokphand said earlier this month that it proposed to offer 4.42 million new and old shares of its 98 per cent owned subsidiary, Ek Chor China Motorcycle Co. Ek Chor China Motorcycle has interests in and manages four Sino-foreign joint ventures in China. Although the Beijing authorities have prohibited state-owned enterprises from seeking direct listings on overseas exchanges other than Hongkong, analysts said mainland joint ventures held by foreign investors were free of such restrictions. With a controlling stake in the holding company, foreign shareholders would have a free hand in any overseas manoeuvre to help growth at their mainland operations, analysts said.