Equity can include cash, buildings, equipment, materials, intellectual property rights, and land-use rights but cannot include labor. All of the above-mentioned investments shall be stipulated in the equity joint venture contract and articles of association, as well as valued through negotiation by all the parties to the venture (except for the site). Government authorities must approve the value of any equipment, materials, intellectual property rights, or land-use rights before the joint venture can be approved.
The technologies and equipment used by the foreign investors as investments must be considered to be advanced and must truly satisfy the needs of China. A foreign investor who uses backward technology or equipment intentionally and deceptively shall be liable for losses, if any.
The investments of the Chinese investor may include the site-use right for the equity joint venture within the duration of its existence. If the said right is not included, then the equity joint venture concerned shall pay the site-use fee to the Chinese Government.
