What are some of China’s rules regarding FDI?

In China, FDI is a privilege, not a right. The government must approve all FDI projects and there are no means of recourse for an investor if their project is denied. Many companies choose to invest in the form of a joint venture as that allows a company to pair with a local enterprise which is already familiar with the government regulations and politics.

Some larger companies still choose wholly foreign owned enterprises, as this allows greater control over technology and intellectual property rights than a joint venture does. Also, by setting up a wholly foreign owned enterprise there is no chance of conflict with the local partner as exists with a joint venture.

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