Chinese securities managers take in Los Angeles financial horizons.

Local experts have given 33 Chinese securities managers and financial writers their first taste of capitalism this side of the Pacific.

Los Angeles was the first stop in their four-city tour, which features financial highlights here and in San Francisco, Washington, D.C., and New York. The four-day program in Los Angeles introduced the delegation to the basics of the U.S. capital market, local securities brokers, lawyers, and Pacific Stock Exchange officials -- before sidelining into Disneyland and Universal City.

Yang Qiguang, chief editor of Beijing's Financial News, was impressed by the new ideas he picked up from "famous financiers."

Among others encountered locally by Qiguang and his associates from Wuhan-based Central-South Securities brokerage were Leo Tseng, vice president of Merrill Lynch in Century City, and James Bass, attorney with downtown L.A. law firm Gibson, Dunn & Crutcher.

Tseng presented an excellent "sketch of the American securities market," according to Central-South Securities Deputy President Sha Hui Lai. Bass brought the process closer to home by showing how businesses on the Chinese mainland have successfully raised money on the New York Stock Exchange.

Brilliance China Automotive Holding Ltd. and China Tire Holdings Ltd. are two examples of Chinese joint venture enterprises that have raised money via common stock listings by a foreign holding company. In these cases, Bermuda holding companies, whose sole interests are in the Chinese joint venture, issued the common stock which is now traded on the NYSE.

Other Chinese companies have raised money on the NYSE by issuing American Depositary Receipts (ADRs). ADRs are a U.S. proxy for shares traded in foreign markets. For instance, ADRs for Shanghai Petrochemical Co. Ltd. began trading on the NYSE last Monday (July 26).

The tour is one of many in a wave of Chinese visits that has been sweeping Los Angeles. According to Pamela Mitchell, public affairs specialist for the Pacific Stock Exchange, "There have been thousands of Chinese visitors to the Pacific Stock Exchange in 1993."

Furthermore, she said, "I don't get students from the People's Republic, it's basically business people."

The Merrill Lynch-affiliated tour was sponsored by North Hollywood-based PBA International and Los Angeles-based Angel Technological Development Center. The two groups organized the delegates' U.S. itinerary for China's Science and Technology Exchange Center, Beijing's official tour contractor.

PBA consults, brokers and manages properties for foreign and domestic real estate interests; Angel acts as a liaison between Beijing and U.S. interests.

Angel President Sue Zhang said she was first approached by delegates from the Science and Technology Exchange Center to arrange a U.S.-based real estate seminar. Zhang, who emigrated from China 12 years ago and recently became a U.S. citizen, had personally known one of the delegates when she lived in China.

The first real estate seminar was set up this June and was such a success, said Zhang, that she added programs geared to those working in China's financial markets.

To provide local experts for her Chinese real estate clientele, Zhang contracted the services of PBA International after reading the Chinese translation of a 1980 guide book called California Real Estate, by PBA partner Victor Hsia.

A PBA report notes that investors from mainland China "spent close to $1 billion in U.S. real estate projects" in 1992.

PBA co-sponsored the real estate seminars, then contracted with Angel to arrange the current program.

"The Chinese securities and investment market is one to watch very closely," said Hsia, "an explosion of venture capital opportunities on both sides of the Pacific is rapidly emerging."

Financial analyst Peter Wall has tracked the rather unorthodox development of China's markets for the World Bank's International Finance Corp. According to Wall, Beijing began the privatization of its state-owned enterprises during the mid-1980s, when it authorized some state enterprises to offer bond-like securities that were subsequently traded.

China opened two official stock markets in 1990 -- one in Shanghai, the other in Shenzhen -- and brokerages in the country's major cities. Wall said the government's China Securities Regulatory Commission, created last October, "sets out the guidelines for all capital markets," including rules and regulations for public issues, accounting and auditing standards, and the licensing of brokers and dealers. A cabinet-level government body oversees the CSRC and sets policy for the development of China's securities markets.

According to Hsia, although about 5,000 Chinese companies have been authorized to issue stock, only about 100 companies are publicly traded so far.

In addition to its real estate interests and training programs, PBA facilitates joint ventures for Asian and American interests as a principal or as a financial adviser. PBA recently arranged for Los Angeles-based Mellos Distributors to operate a joint venture in Beijing which makes popcorn machines and markets popcorn products.