By improving accounting, legal and other "intermediary" services, China will be able to better regulate and develop its socialist market economy, government advisers said.

"China's intermediary sector has witnessed a boom during recent years," said Guo Guoqing, a member of the 10th National Committee of the Chinese People's Political Consultative Conference (CPPCC) at its annual meeting.

"Staff in the sector have greatly contributed to the creation of job opportunities and to economic development," he said on Monday.

For example, there were at least 20,000 intermediary organizations which collectively employed more than 500,000 people by the end of 2002, said Guo, who is also a professor with Renmin University of China.

Intermediary organizations such as auditing, accounting and valuation firms serve as a bridge between government and business by providing supervisory, advisory, co-ordination, regulation and certification services, according to Guo.

But some problems exist among such appraisal services because the intermediary market and the system of business ethics are still immature, said CPPCC 10th National Committee member Yu Shuxia.

Statistics indicated that more than 100 accountancy firms and 400 certified accountants were punished for their involvement in cases of misconduct and forgery in the first half of 2001, she said.

According to Guo, the existence of many State-run intermediary organizations had also caused some problems, such as unfair competition and poor service.

Yu said that too many government departments oversaw the market and imposed different standards.

According to Yu, more than 10 ministries and departments, such as the Ministry of Finance, Ministry of Civil Affairs and Ministry of Public Security, manage intermediary organizations.

Guo said the intermediary sector also lacks regulations to properly supervise, co-ordinate and decrease trade costs.

"To win a greater market share, some organizations make false promises, forge accounting records, even blackmail their customers and perjure themselves in court. All these activities spoil the image and reputation of intermediary organizations among the public," Guo noted.

To tackle the problems, Yu Shuxia suggested that the government speed up reform of intermediary organizations by regarding the sector as a pillar industry.

The governments should also transfer non-administrative functions to intermediary organizations, she said.

The nation should streng-then legislation by drafting laws and regulations to force intermediary organizations to abide by international practice, she said.