US-based advertising agency TBWA Worldwide will increase holdings in its two China operations as the government waives rules governing foreign investment in the domestic market.

Jean-Marie Dru, the agency's president and chief executive officer, said in Shanghai yesterday it would increase its stake "step by step."

He added that TBWA, part of the giant Omnicom Group Inc, hopes to set up a wholly owned business in China by 2005 when the country lifts all investment restrictions on foreign advertising firms.

No details on when the company would start increasing its investment were disclosed.

Dru, who was in town to attend the company's week-long annual operating meeting, the first time TBWA had held the meeting outside the United States, said it was important to be in China, the fastest-growing advertising market in the world, as it will surpass Japan to be the world's second-largest in the near future, trailing only the United States.

In 2003, China advertisers spent US$14.5 billion, up 30 percent from a year earlier, according to Nielsen Media Research.

"As the world's fastest growing network, we hope to quicken the process of bringing our culture to the Chinese market." said Dru.

"We hope to help our clients, both the multinational and the domestics, win a larger market share in the future."

From this month, China allows foreign investors to take up to a 70 percent stake in advertising agencies from 49 percent previously as part of its World Trade Organization commitments.

The investment cap will be fully lifted in 2005, according to the country's WTO pact.

Currently, TBWA has two ventures in China, one in Shanghai and the other in Beijing.

"China is now playing an important role in the development of the world's advertising industry," Dru said.

John Hunt, TBWA's creative director, added that the company was carrying out a so-called strategy of "being disruptive" in the Chinese market.

"Being disruptive means to make advertising unconventional," he said.