General Motors Corp and its Chinese partner got final regulatory approvals yesterday to operate in China's fledging auto financing sector.

　　The green light by the China Banking Regulatory Commission for GM and Shanghai Automotive Industry Corp will make their joint-venture auto financing company the first on China's mainland.

　　With registered capital of 500 million yuan (US$60.24 million), the new auto financing company is allowed to lend to individual car buyers and auto sales agents and attract three-month-plus deposits from its shareholders, the CBRC's Shanghai Supervision Bureau said in a statement yesterday.

　　General Motors Acceptance Corp, a wholly-owned subsidiary of GM, contributed 300 million yuan to the new venture with Shanghai Automotive Group Finance Co, a subsidiary under Shanghai Automotive, tipping in the rest.

　　GM China said in a press release that the start of the auto financing business will be a milestone for GM's expansion in China.

　　It helps extend the long-term strategic partnership between SAIC and GM from the current auto design, production and sales to the new finance sector.

　　Shanghai Automotive said the new joint venture will integrate global auto financing experiences and knowledge of the local market.

　　Without providing a specific date, GM China yesterday said the financing venture is under final preparation and "will start business soon."

　　The outstanding value of individual auto loans reached 9.21 billion yuan in Shanghai at the end of June, a rise of 9 percent from the beginning of this year, according to the CBRC.

　　"It is the right time to introduce auto financing companies into the auto loan sector which still has huge potential to grow," said the CBRC statement.

　　Only about 20 percent of car sales on China's mainland are financed, compared with about 70 percent in developed markets, according to a spokesman for the CBRC.

　　GM China said it expects the situation to change quickly. It predicted that auto financing in China will likely grow to 80 percent in the coming years.

　　GM unveiled its ambitious expansion in China in June by investing US$3 billion through its local joint ventures, and boosting annual output to 1.3 million units from 530,000 units by 2007.

　　Volkswagen AG and Toyota Motor Corp obtained licenses for auto financing at the same time as GM last year. US auto giant Ford is the fourth and latest comer into the sector after it got the nod from the regulators early this week.