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In
China, there are 1.3bn people living on 9.6m sq km of land. The country
comprises 5 autonomous regions, 23 provinces, 4 municipalities and 2 special
administrative regions. The huge land is rich in natural resources and cultural
deposits. Due to its size, the climate, culture, as well as economic diverse.
So, it’s the great diversity makes China a most attractive place for both
visitor and investor. Also since the implementation of the reform and open-up
policy, China has been seen a booming economic, which brought not only numerous
business opportunities, but also investors all over the world.
China
Investment Guide--Foreign Direct Investment (FDI) in China
China's
absorption of foreign investment is an important content of China's fundamental
principle of opening up to the outside world, and is one of the great practices
of building up socialist economy with Chinese characteristics. The Law of the
People's Republic of China on Chinese-Foreign Equity Joint Venture, was
promulgated by the National People's Congress in 1979, then the work of
utilizing foreign capital as an important content of opening up to the outside
world initiated as China's fundamental principle. After twenty years of great
efforts, the scale of absorbing foreign capital increasingly expanded as well
as the level was increasingly upgraded when China's law and managerial system
on foreign investment have been gradually perfected. The achievements won the
whole world's attention, which effectively promoted the continuous, fast and
healthy development of national economy. Here lists some encouraged foreign
investment industries: mechanical industry; textile industry; communication and
transportation as well as post & telecommunications services; coal
Industry; power Industry; petroleum and chemistry industries; service business;
medical industry and electric industry.
China
Investment Guide--Forms of investment
The
foreign investments are basically divided into direct investment and other
means of investment. The direct investment, which is widely adopted, includes
Sino-foreign joint ventures, joint exploitation and exclusively foreign-owned
enterprises, foreign-funded share-holding companies and joint development. The
other means of investment includes compensation trade and processing and
assembling.
1.
Sino-foreign joint ventures
Sino-foreign
joint ventures are also known as share-holding corporations. They are formed in
China with joint capitals by foreign companies, enterprises, other economic
organizations and individuals with Chinese companies, enterprises, other
economic organizations and individuals. The main feature is that the joint
parties invest together, operate together, take risk according to the ratio of
their capitals and take responsibility of losses and profits. The capitals from
different parties are translated into the ratios of capitals, and in general
the capital from foreign party should not be lower than 25%.
The
Sino-foreign joint ventures are among the first forms of China's absorption of
foreign direct investment and they account for the biggest part. At present
they are still a great part in the absorption of foreign investments.
2.
Cooperative businesses
Cooperative
business is also called contractual cooperation businesses. They are formed in
China with joint capitals or terms of cooperation by foreign companies,
enterprises, other economic organizations and individuals with Chinese
companies, enterprises, other economic organizations and individuals. The
rights and obligations of different parties are embedded in the contract. To
establish a cooperative business, the foreign party, generally speaking,
supplies all or most of the capital while Chinese party supplies land, factory
buildings, and useful facilities, and also some supply a certain amount of
capital, too.
3.
Wholly foreign-owned enterprises
Exclusively
foreign-owned enterprises, which are totally invested by foreign party in China
by foreign companies, enterprises, other economic organizations and individuals
in accordance with laws of China. According to the law of foreign-funded
enterprises, the establishment of foreign enterprises should benefit the
development of our national economy and agree with at least one of the
following criteria: the enterprises must adopt international advanced
technology and facility; all or most of the products must be export-oriented.
The foreign funded enterprises often take the form of limited liability.
4. Joint
exploitation
Joint
exploitation is the abbreviation of maritime and overland oil joint
exploitation. It is a widely adopted measure of economic cooperation in the
international natural resources field. The striking features are high risk,
high investment and high reward. The joint development is often divided into
three steps: exploitation, development and production. Compared with the other
three means mentioned above, joint cooperation accounts for a small ratio.
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