A LAW requiring foreign valuers to team up with mainland practitioners before they take on valuation jobs should be in place next year, mainland sources say. The law will essentially establish the valuation procedures and qualifications for foreign valuers operating in the country. It will also spell out who will qualify to value the tangible and intangible assets of enterprises, in a move to streamline standards to prevent a further leakage of state assets. Sources said the law would state that mainland-qualified valuers must be recruited to work hand in hand with foreign valuation companies to help Chinese valuers raise their knowledge and experience in valuation. China faces a serious shortage of valuers, whose numbers must increase to at least 100,000 to cope with the demands of its breakneck pace of economic growth. But, at present, it has closer to 10,000. But, while the law will require mainland qualified valuers to take part in valuation projects, foreign valuation companies will still be able to enjoy complete autonomy in finalising reports. The law also highlights the need for established foreign valuation companies to provide comprehensive valuation services and for foreign valuers to have the proper paper qualifications and experience. At present, some accountants also double as valuers who, in developed countries, must be properly-trained professionals. Since late last year, China has put in a series of measures to stem the massive leakage of state assets in Sino-foreign joint ventures and domestic shareholding companies. Chinese statistics showed that foreign businesses had 'stolen' nearly US$10 billion from China by over-valuing their assets in joint ventures, so claiming a disproportionately large share of profits. Joseph Ho, director of plant and machinery valuer Sallmanns - which was involved in the valuation of the Tsingtao Brewery and Guangzhou Shipyard - said a large portion of money being drained out of the country came from joint ventures which involved the supply of production plants. Unlike the 1980s, when foreigners tended to contribute cash in Sino-foreign ventures, they now prefer to contribute plant and machinery, giving rise to the debate about the valuation of tangible assets. To plug the loophole, foreign investment in the form of plant and machinery must obtain valuation certificates issued by the State Import and Export Commodity Inspection Bureau. But, Mr Ho said, while regulation was necessary, it was more important to train more qualified mainland valuers to enable them to do a proper job. Billions of dollars would continue to flow out of China as long as the great shortage remained, he said. 'The history of valuation in China is very short. In all, it counts for no more than 10 years and is still a developing practice, with three government departments dealing with valuation of state and foreign-owned assets,' Mr Ho said. They are the National Administrative Bureau of State-owned Property, State Land Administrative Bureau and the State Import and Export Commodity Inspection Bureau.