HSBC Holdings, the world's second-biggest bank by market value, yesterday gained the first licence for a foreign joint venture to sell insurance on the Chinese mainland.

HSBC will have a 24.9 per cent stake in the venture - Beijing HSBC Insurance Brokers - which aims to tap into the world's most populous country as it opens to foreign business.

Shanghai Hua Yu Asset Management will own 50.1 per cent and Beijing Zhong Ke Engineering will hold 25 per cent in the venture, which will be capitalized at about US$1.9 million.

HSBC will contribute US$498,000, the bank said in a statement. It will be based in Beijing and sell reinsurance and marine, aviation, transport and healthcare insurance to companies doing business in China.

HSBC was founded in Hong Kong and Shanghai in 1865 to finance trade between China and Europe. The bank, now based in London, is targeting the Chinese mainland for expansion as the world's most populous country opens its markets to foreign business.

"We will be able to apply our considerable managerial and technical expertise to offer customers a professional, competitive service in an exciting, substantial and growing market," Mike Dixon, chief executive of HSBC Insurance Brokers, said in the statement.

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