Introduction
China began developing its present legal system in the late 1970's.
The passage of the Sino-Foreign Equity Joint Venture Law in 1979 was
the first step by the Chinese government to build a legal structure
governing foreign investment. Since then China has continued to build
a legal system that will protect their rights as well as the rights
of their foreign partners.
With the passage of various Memorandums of Understanding between China
and the United States, along with China's efforts to maintain Most
Favored Nation (MFN) status with the United States and China's attempts
to gain entry into the General Agreement on Trade and Tariffs (GATT),
a flurry of new legislation has been introduced during the last three
years in an attempt to modernize China's economic legal structure.
These new additions to China's legal structure have improved the investment
prospects in China greatly and make 1994 the most opportune period
for investment in China since World War II.
The Establishment
of Operations in China
At present there are five different methods of establishing operations
in China. They include:
¡ñ Setting
up a representative office
¡ñ Setting
up a branch office under the Company
Law
¡ñ Establishing
an equity joint venture
¡ñ Entering
into a cooperative joint venture
¡ñ Setting
up a wholly foreign owned enterprise
Each of these
methods of entering into the China market generally has their own
advantages and disadvantages. Click on the underlined portion of
the description above to read more about that particular method.
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