unlikely of countries -- communist China.

In recent months, two China-based manufacturing companies have transferred their registration domicile to Bermuda in order to seek listings on the New York Stock Exchange to raise capital for expansion.

Ek Chor China Motorcycle Company and Brilliance China Automotive Holdings are the only two China-based companies to be listed on the NYSE.

Not only did both companies choose Bermuda as their new domicile, following in the footsteps of over 150 Hong Kong-based entities, but both used the services of local law firm, Appleby, Spurling & Kempe, which has an office in Hong Kong.

Mr. Peter Bubenzer, a partner in AS&K, said the decision of both companies to choose Bermuda over its offshore rivals could open up the way for more Chinese firms to move here.

He said the potential for new business from China is vast, but added that he did not necessarily expect a rush of new company formations.

The Communist government in China has shown that it recognises "the practice of capitalism as an essential part of their survival and an essential part of the continuing development of their people'', said Mr. Bubenzer.

As AS&K associate Mr. William Chernenkoff, who will soon join the company's Hong Kong office, put it: "Chinese leader Deng Xiao Ping once said that it doesn't matter whether a cat is black or white as long as it catches mice.'' Although Ek Chor and Brilliance are both based in China, only the latter required Beijing's approval to move abroad because it is owned by Chinese interests.

Motorcycle manufacturer Ek Chor, on the other hand, is principally owned by Thai company C.P. Pokphand and did not require such permission.

After Brilliance hit NYSE at $16 per share its price quickly soared to as high as $33 before steadily slipping.

Its stock touched a low of $165 before news of Ek Chor's flotation revived investor interest. At lunch-time yesterday, Ek Chor shares were trading at $235 .

Ek Chor got off to a rousing start when it was first listed on NYSE last week, with its shares beginning trading at $25 against an issue price of $21.

Yesterday, its stock was trading at $235 .

Mr. Bubenzer and Mr. Chernenkoff said their decision to come to Bermuda is testament to the Island's growing international reputation as the world's most prestigious offshore jurisdiction.

Mr. Bubenzer said: "In part, the success of these offerings has happened not only because Bermuda is an acceptable jurisdiction in Hong Kong but because it is also acceptable to financial markets in the US and elsewhere.

"There are a number of companies based here which are listed in New York and elsewhere. It reflects well on Bermuda.'' Mr. Chernenkoff, who knows Asia well and has spent time in China, Japan and Hong Kong, added: "The world has decided that Bermuda is the jurisdiction of choice for international financings for Hong Kong and mainland China entities.

"We have incorporated two China-based companies already but there are several others who are watching very closely what's going on.

"It's quite extraordinary that a communist country like China is using places like Bermuda and New York to raise money. This bodes very well for Bermuda.'' Would AS&K consider opening up an office in Beijing, given the chance? "That's certainly an interesting possibility,'' said Mr. Bubenzer. "But I think it's unlikely at this stage.''