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Foreign investment will be allowed into China's security service industry next year in line with the country's commitment to the World Trade Organization, a senior official said yesterday.

The industry, currently solely funded and operated by public security departments, will be open to private investors from home and abroad, said Ma Weiya, deputy director of the public order regulation department under the Ministry of Public Security.

"The opening is essential to a rapidly growing industry, and is also our WTO commitment," he said during the first Beijing International Security Forum yesterday.

The security service industry includes bodyguards, transportation protection, residential and office security, and equipment such as alarms.

He added that China's first regulation on the security service industry, which is likely to be issued in the first half of next year, would spell out specific requirements on the opening.

"In principle, foreign investors will be allowed to set up joint-venture security companies in China. But certain areas, such as armed escort service, will remain closed," he said.

Ma said no country would unconditionally open this special field as it is closely related to State and social security.

Ministry figures show that since the opening of China's first security service company in 1984 in Shenzhen, Guangdong Province, the country now has about 2,300 companies with 1.03 million staff.

Ma said the issue of the regulation would change the existing policy that only public security departments are allowed to open security service companies, and make it more market-oriented.

"At the initial stage of the industry, it's necessary to have a centralized management authority," he said. "But now, it's time to open the market and turn public security departments from operators to regulators."

The regulation will spell out specific criteria for grading security companies and staff. Credit records will also be set up for the companies.

Mo Jihong, a researcher with the National Institute of Law under the Chinese Academy of Social Sciences, said the policy change would be beneficial to a healthy market.

"Without monopolization, the market will become more competitive and customers are likely to enjoy better services," he said.

The 2008 Beijing Olympic Games and 2010 Shanghai Expo are considered as two favourable opportunities for the rapidly expanding industry.

Gao Yu, deputy director of the Beijing Public Security Bureau, said at the forum that security staff would be an essential supplement to the police force in safeguarding the Olympic Games.

He said security staff would be responsible for safeguarding sports venues, maintaining public order and checking certificates during the Games.

A special training programme has been launched for 740,000 security staff in Beijing to improve their professional skills and knowledge before the Games.