ANALYSTS have poured cold water on China's plans to double the size of the B share market this year in a bid to revive its despairing fortunes. They have reservations over the market's ability to absorb new issues when foreign investors are becoming more cautious of investing in China. China yesterday announced plans to expand the number of companies available to foreigners this year, in a bid to attract foreign capital to stimulate its lumbering state sector. ''The present B share market is too small to meet the enterprise demand for foreign fund supply,'' Liu Hongru, chairman of the China Securities Regulatory Commission (CSRC) was quoted as saying by Xinhua (the New China News Agency). Mr Liu, speaking at the 1994 China summit meeting that opened in Beijing yesterday, also said China planned to merge A and B share markets at a later date, but provided no details. Although he did not say how many new issues would be added, Xinhua reported that sources close to the commission said at least 50 new B shares would be listed in Shanghai and Shenzhen this year, double last year's figure. There are now 28 B shares listed in Shanghai and 21 in Shenzhen. Masaharu Amagi, managing director of Dai-ichi Securities Pacific, in reply to questions over the feasibility of listing 50 companies this year, said: ''I don't think so.'' ''[You] compare [them] to H shares and Hong Kong ordinary shares. There is a lack of information and market stability [in the B share market],'' he said of the handicaps drawing investors away from the market. The market slump had been compounded by high inflation, overheating and tightening monetary control in the short term, he said, although he was comfortable with the market's long-term prospects. An analyst with a British-based brokerage shared Mr Amagi's view over the listing of 50 companies. He questioned whether these share issues could find underwriters in the face of the bad market and whether the companies could all be listed within the remainder of this year. Expanding the size of the market would not solve the cause of the lacklustre market, he said. ''A better solution will be to increase the market's transparency by, for example, raising the standards of information disclosure and accounting principles,'' he said. ''Only after these issues are resolved will the expansion of the B share market be proved useful,'' he said. Jacky Chiu, head of China research of Nomura Research Institute, said the problem did not lie with the size of the market, but the quality of stocks. Analysts say there is much for the companies to do if they wish to win investors' confidence. The Credit Lyonnais China B Index has fallen 33 per cent since the beginning of this year and turnover has been extremely low. In a bid to attract more investors, Mr Liu said the CSRC might also allow enterprises to have American depositary receipts and issue convertible bonds and other stock-related paper. He said China was still studying plans to allow foreign companies to list on Chinese markets. ''Right now our market is not open to foreign companies, though in the long run it will be,'' Xinhua quoted him as saying. ''But we are studying schemes put forward by foreign firms.'' Both Daimler-Benz and the Bank of East Asia have said they are interested in listing in Shanghai. Mr Liu said China first needed to map out specific laws and regulations to standardise issuing and listing procedures for foreign companies, and determine which accounting codes they must follow. ''We must specify what kinds of foreign companies are eligible to be listed in China and how to supervise them,'' he said. ''The impending task is to study how to deal with the problem of free flow of capital while the yuan is still not freely convertible and foreign exchange is still controlled,'' he said.