CHINA has begun to put in place a series of measures designed to stem the massive leakage of state assets in Sino-foreign joint ventures and domestic shareholding companies. Key measures include: Holding the first national examination today to certify those who may carry out asset valuations in Sino-foreign joint ventures and domestic enterprises. Setting up a National Valuation Association, done last week in Beijing, which could eventually evolve into a professional body for those making valuations. Encouraging provinces, beginning with Henan, to issue tangible asset valuation regulations for Sino-foreign joint ventures. Doubling the number of land valuers to about 200 by the first half of next year. Between 300 and 400 engineers are expected to take part in today's nationwide examination conducted by the Import and Export Commodity Inspection Bureau (CIB), a key department in charge of valuing plant and machinery imported by foreign partners in the joint ventures. Unlike the common practice elsewhere of hiring professional valuers, China relies on auditors and accountants who are not necessarily qualified to carry out valuations. ''There is no distinction in China between valuers and accountants. So we find accountants doing the job which would normally be done by a professional valuer in either Hong Kong or the UK,'' said Joseph Ho, associate director of property consultants and plant and machinery valuer Sallmanns. He said because of this lack of distinction on the mainland, it was often not easy for mainland accountants doubling up as valuers to dispute the valuations of foreign partners in joint ventures. ''If both parties put cash in a venture that's no problem. But when one party contributes equipment brought in from overseas, then the problem of valuation could arise,'' he said. Therefore, the move to test engineers who could qualify as valuers of plant and machinery on the mainland would help China set up a proper system of valuing plant and machinery. In future, the National Valuation Association, established to gather and exchange information on latest valuation methods, could eventually set standards for the industry. The association was put in place by the National Administrative Bureau of State-Owned Property, the overall co-ordinating body in charge of state asset evaluation, and the 50 Chinese companies licensed to do valuations on the mainland. The leakage of state assets prompted Henan to become the first province to establish regulations for tangible asset valuations, promulgated last month. It is understood Fujian is following its footsteps. Mr Ho said he would not be surprised if the laws were adopted by the other provinces by next year. Mr Ho said the CIB was seriously concerned with the over-valuation of assets by some foreign investors because most of them were bringing in plant and machinery instead of cash into their joint ventures. In the early 1980s, about 80 per cent of foreign investment was in cash. Today, about 70 per cent involves plant and equipment supply. An official investigation of 2,623 ventures in the first eight months allegedly shows that foreign investors actually invested US$400 million in assets instead of the $700 million that was claimed. David Scott, China valuer for Henry Butcher (HK), said: ''It is increasingly common to hear of complaints of over-valuation of assets by foreign joint ventures in China.'' He said many ventures depended on second-hand plant and machinery in their projects as new plants cost much more and might take longer to be delivered. But this did not necessarily mean the machines were obsolete. ''But I think the leakage of state assets could be minimised if China comes up with clear standards to value plant and machinery and employs professional valuers,'' he said. John Rowland, a manager at American Appraisal Hong Kong, said different figures could crop up for the same machinery because of the different methods of valuations.