1990 Fiscal Year Final Research Report Summary
The Economic Investment Law in People's Republic of China
Project/Area Number |
01520023
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Research Category |
Grant-in-Aid for General Scientific Research (C)
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Allocation Type | Single-year Grants |
Research Field |
Civil law
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Research Institution | Tokai University |
Principal Investigator |
LIU Teh-koan Tokai University, Collage of Law, Professor, 法学部, 教授 (40201115)
|
Project Period (FY) |
1989 – 1990
|
Keywords | Three basic options for foreign investors in China / Each one has its own Laws / Equity Joint Ventures / Cooperative Joint Ventures / Wholly-Owned Subsidiaries / 14 Coastal economic development Zones / Four Special Economic Zones / Shanghai World Economic Herald, 1986 / 09Shanghai Putung Area Development Herald, 1990 |
Research Abstract |
There are three basic options for foreign investors in China : equity joint ventures, cooperative joint ventures and wholly-owned subsidiaries. Each form of investment has its own governing Law, advantages and disadvantages. The normalization of trading relations between the United States and China in 1979 was accompanied by the passage of joint venture legislation in China designed to attract foreign investment and Know-how. In essence, Chinese joint ventures involve sharing profits and risk in proportion to the registred capital of the joint ventures. The Bank of China has occasionally taken equity Positions in joint ventures. Equity joint ventures have not always been attractive investments. Foreign investors (especially Hong Kong and overseas Chinese) have often relied on a less regulated form of doing business in China, the 'cooperative enterprises'. By 1988, more than 5,000 such enterprises had been established. In 1983 China designated fourteen coastal cities where wholly-owned foreign subsidiaries (WFOEs) could be established in economic development zones (EDZs) Prior to 1983, such subsidiaries could only be established in four special economic zones. SEZs Most WFOEs are small companies established by Hong-Kong Chinese in the SEZs. The 1986 Law on wholly Foreign-owned Enterprises covers subsidiaries and branch offices.
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Research Products
(10 results)