Pundits insist that any ramping-up of opportunities in China remains years away, despite that country's pending admission to the World Trade Organization.

But officials at the Hartcourt Cos. beg to differ.

The Los Angeles-based company formerly a manufacturer of pens, writing tools and environmental engineering equipment decided to change course a few months back. They would instead concentrate on three things: China, telecommunications and the Internet.

"The new economy is where we want to be and China is where we want to be," said Alan Phan, Harcourt's president and chief executive, who founded the company in 1990.

Already, the company is setting up joint ventures with Chinese companies to capitalize on China's untapped demand for financial-oriented Web sites and cable TV programs aimed at helping aggressive Chinese investors decide what decisions to make.

In March, Hartcourt launched a new holding company and financial Web site in China called Sinobull.com, in which it has a 48 percent controlling interest. The site, operated out of four offices in China by the holding company, offers financial news stories related to China and the broader overseas market, real-time quotes from the Taiwanese and Hong Kong stock markets, quotes from the Shenzen and Shanghai stock markets, and financial chat rooms.

In addition, customers can sign up to do online e-trading with 10 of the 15 largest securities companies in China, said Mike Bianco, president and chief executive of Sinobull.com.

"It is the only nationwide online financial services Web site in China," Bianco said, adding that the site averages 1.8 million page views a day.

Of course, there are a few glitches to be worked out. "The technology needs to be further developed on the infrastructure, and security issues need to be looked at closely. And you have a real challenge in finding people who are IT (information technology) qualified," Bianco said. "Other than that, it's easy."

While Hartcourt may control one of the first financial Web sites in China, it is not the only one. Others include HomeWay.com, StockStar.com, China.com and Sina.com, providing mostly financial news and content.

Hartcourt also wants to become the next CNBC of China. And that may happen very soon. One of Hartcourt's subsidiaries, Shanghai Guo Mao Financial Corp., has teamed up with China Cable Networks to provide financial news to the 80 million cable TV viewers in China. Hartcourt's subsidiary will develop TV content, including real-time market data and commentary.

Phan said his company is looking for anchors right now and preparing to broadcast from 9 a.m. to 10 a.m., Mondays through Fridays, beginning Aug. 1.

China, with 1.3 billion people, is one of the biggest untapped computer markets in the world. And it is a nation of astute business people hungry for financial information.

Goldman Sachs Investment Research shows that in 1998 there were 2.4 million Internet users in China and 700,000 in Hong Kong. Within the next three years, that is expected to explode to 80.5 million Internet users in China and 3 million in Hong Kong.

"China currently has a fairly low rate of Internet hosting and PC penetration," noted Matt Sanders, an analyst with Forrester Research, an Internet analysis firm in Massachusetts. "But China has the second largest number of cell phone subscribers, second only to Japan."

Industry analysts are expecting Chinese consumers to use those wireless phones to access the Internet for e-trading, e-commerce and eventually e-banking.

And Sinobull.com, the holding company formed to operate the Web site with five Chinese companies, hopes to capitalize on that market. It is planning to offer a host of financial services that are not currently available in China, but may be one day if the Chinese government lifts regulatory controls on the financial industry.

Hartcourt has always had dealings in China. So when its stock price dipped to around 30 cents a share in fall 1998, from a one-time high of $7.50, the board of directors made a decision. "We were doing $24 million to $25 million in sales from manufacturing, and we were slightly profitable, but our stock price was low," explained Phan. "No investors were interested in manufacturing, even though we were slightly successful. So we decided to participate in the New Economy. We were the early players and we wanted to capitalize on our years in China."

It sold off its pen factory in China and transferred all of its environmental products manufacturing operations to a spinoff called Enova.

Next, Hartcourt entered into joint ventures with five Chinese companies that give the Los Angeles firm access to the Chinese Internet and telecommunications industries. Those include Hong Kong-based Streaming Asia Ltd., a provider of streaming video and audio content; UAC Stock Exchange Online; Financial Telecom, a distributor of financial information via wireless apparatus; Shangdi Network, a multimedia distribution network for financial information; and Shanghai Guo Mao, which provides financial products and information.

The new strategy's effectiveness in boosting Harcourt into the black remains to be seen.

After suffering a net loss of $21.3 million ($1.18 per share) for the year ended Dec. 31, 1998, Harcourt improved to a net loss of $7.9 million (40 cents a share) last year.

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