THE long-term strength of China's economy could lead to an increase in Japanese securities and broking firms setting up regional operations in Hong Kong despite rising commercial rents. There has been a recent increase of Japanese securities houses establishing offices in Hong Kong as brokers concentrate on providing project finance for infrastructure and other businesses on mainland China, according to analysts. Sources said yesterday that major broker Nomura Securities was considering moving its regional headquarters from Tokyo to Hong Kong and Nikko Securities (Asia) recently expanded its operations. Several United States broking firms are also believed to be relocating from Tokyo as the shrinking Japanese economy begins to compare unfavourably with the market opportunities in China. ''We can expect to see more Japanese companies moving regional headquarters to Hong Kong or setting up offices to use as a springboard into the mainland as the potential for business in China expands,'' said Colliers Jardine research manager Paul Burke. There have been fears that rising rents in Hong Kong's business districts will drive companies from the territory, and the weak state of the Japanese economy may lead to further contractions by the Japanese companies. But Hong Kong and China were the only places in the international economy where the Japanese, investing in property or other business, would come out with substantial profits, analysts said. A recent survey of 800 companies showed that Japan has the largest amount of regional offices in Hong Kong with 193 companies, closely followed by the US and Britain. A further 74 companies prefer to have their regional headquarters in the territory rather than Tokyo. Mr Burke said the Japanese were keeping their risks to an absolute minimum in China by only providing project finance on a sovereign lending basis, which meant consortiums being involved with the state or the People's Bank of China. The Japanese, who are among the largest overseas' investors in China, are concentrating their interests on retail, industrial and manufacturing joint ventures and project finance. They have a successful track record in providing project finance and, sometimes, financial aid to developing Asian countries. This has allowed Japanese construction companies to win substantial infrastructure projects.