North China's city of Tianjin will receive 2.5 million euros in aid from the German development aid agency GTZ to boost the building of the port city's property rights trading market.

The three-year project, run by the Tianjin Property Rights Exchange (TPRE) as part of a technical cooperation agreement signed in 1982 between China and Germany, is the first Chinese project in the property rights sector to receive foreign funds.

The Tianjin municipal government and the North Property Rights Common Market (NPRCM), of which the TPRE is a member, will also provide 25 million yuan (3.21 million U.S. dollars) for the project.

The project aims to improve Tianjin's property rights trading market in preparation for the establishment of an over-the-countermarket in the port city, said TPRE director Gao Luan.

Analysts said Tianjin's property rights market and capital market will learn from the German experience under the Sino-German cooperation.

Tangible assets, management rights, intellectual property rights and shares of unlisted firms are usually traded in a property rights market.

In another move towards making itself a financial center, Tianjin applied to the State Council, or China's cabinet, to establish an over the counter market rather than a third stock exchange for the Chinese mainland.

In an over the counter market, securities are traded by dealers who negotiate directly with one another over computer networks, rather than on a centralized exchange. In general, shares are traded over-the-counter because the company is not big enough to meet the requirements to be listed on an exchange.

Tianjin Mayor Dai Xianglong said earlier this month that the city had three models to choose from for the over the counter market, including one that is based on the TPRE and NPRCM, one that is independent of the two markets and one that includes a share trading system for unlisted firms.

The NPRCM, China's largest alliance of property rights bourses, includes 63 bourses from 19 cities, provinces and autonomous regions. It turned over 150 billion yuan in 2006.

The project will also boost the restructuring of China's state-owned enterprises and persuade Chinese firms to broaden their fund raising channels by listing on the Frankfurt stock exchange.