One of the mainland's biggest construction firms, owed US$500 million by the regime of Iraqi President Saddam Hussein, fears it will lose the money if a new government repudiates the debt. And one of the nation's two big oil companies fears for the future of a huge field in Iraq - the mainland's biggest oil investment in the Middle East. As a United States-led attack on Iraq looks imminent, mainland firms are counting the cost of a war on two decades of investment and trading with Iraq, driven by a government strategy that has sought stable sources of foreign oil and opportunities in a market shunned by the West. China Construction & Engineering (CCE) has been the most active of more than 60 state-owned companies in Iraq, with an involvement stretching back to the early 1980s. But the Gulf War of 1991 and the sanctions that followed crippled the Iraqi economy and its ability to pay. As a result, Iraq owes Chinese firms US$1.35 billion, of which US$880 million is for construction contracts and US$466 million for imports, according to official figures. The biggest creditor was CCE - owed US$500 million for roads, ports and other work, part of US$800 million of projects it completed between 1982 and 1990, an industry analyst said. Since the United Nations set up a Gulf War compensation committee in 1993, CCE has lobbied for repayment but has received only US$30.78 million, in June last year. 'If a post-Saddam government repudiates his debts, where will CCE turn?' the analyst said. The other firm with much to lose is China National Petroleum Corp (CNPC) which, with UN approval, signed a contract in June 1997 with the Iraqi government to develop the Al-Ahdab field, with daily output of 90,000 barrels and investment of US$500 million. The project's future is cloudy, especially after Iraq threatened to tear up the contract if CNPC did not continue to honour it. With the start of the UN's 'food for oil' programme in 1996, more than 70 mainland firms returned to Iraq and have since then signed contracts worth US$3.6 billion to build hospitals, bridges, roads, power stations and power transmission systems, for which Iraq has mostly paid in oil. Chinese firms have exported iron and steel, machines and components, metal products, telecommunications and electrical equipment and cars. In the first 10 months of last year, China exported US$384 million to Iraq and imported US$96 million. But, this January, trade was just US$5 million, down 80 per cent from a year earlier, and all exports from China. Chinese electrical appliances, cheaper than those from South Korea and Japan, are popular in Iraq, including those made by Haier, Konka, TCL, Chang Hong and Skyworth. But staff of television manufacturer Konka have left the newly opened Baghdad office. 'We were preparing to expand sales there and in neighbouring countries but have decided to pull out our staff because of the possibility of war,' it said.