Barriers to Foreign Investment in the Chinese Internet Industry
Barriers to Foreign Investment in the Chinese Internet Industry
Summary: Developing an Internet business in China is not easy, even though the country has the largest Internet user population among all countries in the Asia-Pacific region. Chinese laws make foreign investment difficult, and the country -- quite unlike the United States -- has strict legal controls on information and distribution and poor enforcement of intellectual property laws. This article explains the barriers facing high-tech companies in China.
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Introduction
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China has the largest population and one of the fastest-growing economies in the world. If only one percent of its population participates in the New Economy, China will provide a market of more than 13 million potential customers for Internet businesses around the world.
Today, China has approximately 22.5 million Internet users, according to a survey released by the China Internet Network Information Center. Although nongovernmental organizations and foreign agencies have questioned the accuracy of these figures, none have disputed that China has the largest Internet user population among all countries in the Asia-Pacific region.
While the Chinese market is attractive, developing Internet business in China is not easy and can be frustrating at times. Due to the different political, social, economic and cultural conditions, foreign investors face significant barriers to establishing Internet businesses in China. Disillusioned from their idealism and tired of the bureaucratic red tape and regulatory hassles involved in investing in China, many investors have exited the Chinese market.
Foreign Investment Law
The current Chinese laws and regulations are unclear as to whether foreign investment in the Internet industry would be allowed. Experts generally maintain that Chinese telecommunications laws forbid foreign participation in the Internet sector. Under those regulations, foreign
Summary: Developing an Internet business in China is not easy, even though the country has the largest Internet user population among all countries in the Asia-Pacific region. Chinese laws make foreign investment difficult, and the country -- quite unlike the United States -- has strict legal controls on information and distribution and poor enforcement of intellectual property laws. This article explains the barriers facing high-tech companies in China.
[pic]
Introduction
| |
China has the largest population and one of the fastest-growing economies in the world. If only one percent of its population participates in the New Economy, China will provide a market of more than 13 million potential customers for Internet businesses around the world.
Today, China has approximately 22.5 million Internet users, according to a survey released by the China Internet Network Information Center. Although nongovernmental organizations and foreign agencies have questioned the accuracy of these figures, none have disputed that China has the largest Internet user population among all countries in the Asia-Pacific region.
While the Chinese market is attractive, developing Internet business in China is not easy and can be frustrating at times. Due to the different political, social, economic and cultural conditions, foreign investors face significant barriers to establishing Internet businesses in China. Disillusioned from their idealism and tired of the bureaucratic red tape and regulatory hassles involved in investing in China, many investors have exited the Chinese market.
Foreign Investment Law
The current Chinese laws and regulations are unclear as to whether foreign investment in the Internet industry would be allowed. Experts generally maintain that Chinese telecommunications laws forbid foreign participation in the Internet sector. Under those regulations, foreign