NEW YORK -- VF Corp. said Thursday it had signed an agreement to manufacture and market its Lee brand jeans in China. VF said this marks the first significant entry of a major American jeans brand into the Chinese market.

Through a joint venture deal, VF will hold a majority stake in a new company, the Guangdong Taishan Lee Clothing Co. Ltd., in partnership with the Famous Horse Group, a large textile and apparel manufacturer based in Hong Kong and China, and the Taishan Textiles Import & Export Co., a Chinese government agency. The joint venture plans to eventually change its name to the China Lee Jeans Co.

The new company will initially market Lee jeans to department and specialty stores in the Southern Province of Guangdong, China's wealthiest province, and will expand to Beijing, Shanghai and other major cities throughout China.

"This commitment to China marks a milestone for VF Corp. and the Lee brand," said Lawrence R. Pugh, chairman and chief executive officer of VF. He added he "would be disappointed if we couldn't be doing $50 million in sales in the next three years" in China.

A VF spokeswoman said production should start in October, with shipping to begin by the end of the year. A marketing and advertising program will follow in January. A VF spokeswoman said the company's financial investment in the deal is "minimal" since it uses existing facilities.

"We may find in the future a need to build our own factory," she said.

The Lee jeans will be produced in a Taishan factory leased from Famous Horse using denim provided by Guangdong Taishan Textile Industrial Ltd. of the Famous Horse Group.

"Just as we manufacture the majority of our jeans at home for U.S. buyers, so too will we manufacture locally in China to be close to our customers there," Pugh said.

To insure that workers' rights are respected and to provide working conditions that are safe, VF pointed out, it uses a comprehensive auditing system for its contractors, backed by regular visits to suppliers' and partners' factories.

Jeanswear is VF's largest product category, accounting for 56 percent of the company's 1993 sales of $4.3 billion.In addition to Lee, its jeans brands include Wrangler, Rustler, Riders and Girbaud.

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