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When a clothing shop was overstocked with fur coats in early summer, the storekeeper decided to pawn them in order to advance some money for new season goods. "A pawnshop is a reliable warehouse where you don't have to worry about damage to your property," said the storekeeper in Hangzhou, capital of the eastern Zhejiang Province. "You can redeem it easily before next winter, when you'd have probably made enough money out of summer wear." And the service fee charged by a pawnshop -- normally around 3.6 percent of the item's value -- is much lower than the storage fee charged by a warehouse, he said. In Zhejiang, where small and private businesses abound, pawnshops have become an ideal choice for those who urgently need money, particularly small business owners who need more cash to start up their businesses and who know how to expand in a cost-effective way. Many store-owners pawn jewelry or other valuables before they travel to Guangzhou, a southern industrial base that leads the country in fashion and other manufactured goods, to build up their stock. "I would never have borrowed money from friends and relatives if I had known about pawnshops earlier," a businessman said to Wang Liming, a pawnbroker in Hangzhou. "Among our customers are also people who need large sums to cover medical bills, children's tuition or down payment for a new apartment," said Wang. At the top of most pawnbrokers' lists are gold items -- watches, necklaces, chains and other pieces valued by the Chinese, very often heirlooms handed down generation to generation within their families. Insiders say gold takes up 40 percent of all pawned items, followed by automobiles at 25 percent, and real estate, 15 percent. Household appliances, antiques, paintings and calligraphic works together account for 20 percent. "Obviously, the rich come to a pawnshop more often than the poor," said Li Kelin, a pawnbroker in Wenzhou City, a major manufacturing base in Zhejiang. "Gone are the days when a pawnshop was the last chance for the poor to get a full meal." Pawnshops, often acknowledged as the forerunners of the country's financial industry, appeared in China some 1,700 years ago. A vivid description of pawnshops in the old days is still seen on films and TV series today, often with a poor widow who was carrying a starving baby in her arms, reluctantly pawning her silver hairpin -- the last piece of her dowry and the only valuable item in her house -- to get food for the baby. Pawnbrokers, in those days, were known as "bloodsuckers" because they took items at extremely low prices and -- as few could afford to redeem them -- sold them to the rich at high prices. Pawnshops were abolished when the People's Republic of China was founded in 1949, but reappeared in the 1980s as small financial enterprises under the control of China's central bank to serve individuals and private businesses and grant small loans with a simpler application process than that of commercial banks. In 2000, pawnshops across China were redefined as industrial and commercial enterprises under the control of the State Economic and Trade Commission, a change that heralded looser regulations and better taxation policies. On the other hand, China's opening of the pawn broking industry to the private sector in August 2001 has imbued the centuries-old trade with a new charm. Many investors are trying their luck in the field, lured by its potential for further development and good returns -- six to eight times more than the interest rates offered by commercial banks. In 2001, the 34 pawnshops in Zhejiang Province reported a total net profit of 38.83 million yuan (US$4.6 million). They had been joined by seven other pawnshops by August 2002. In the provincial capital, Hangzhou, 29 companies have applied to set up pawnshops, said Chen Ruchang, a trade official with the provincial government. Analysts here predict the traditional pawn broking industry will become a new attraction to the abundant private capital in Zhejiang, which is expected to exceed 800 billion yuan (US$96.4 billion) in the next three years.