PRC Law on Sino Foreign Joint Ventures
a) What aspects of its regulation has China liberalized in order to conform to international standards?
Before and after joining in WTO, China has liberalized aspects of its regulation to conform to international standards.
First aspect is the law that China permits wholly foreign owned operations in its territory. The Joint Venture now is an important vehicle for foreign investors to obtain Chinese market sensitivity, capability, and experience.
Second is the capital source control. The JV in China can borrow capital funds from banks outside China.
Third is the company management method. The chairperson and deputy chairperson shall be selected by equity joint venture partners through consultation or election. And these two positions will be filled by different partners.
Forth is that China requires JVs to provide assistance to the union organization establishment.
Fifth is the foreign exchange control. The employee in JV can remit their money (income after tax) abroad.
Sixth is the way to solve arguments between partners in JV. The dispute will be handled by the board of directors. If fail, it will go to the Chinese arbitral body or an arbitral body which agreed by all parties of a JV.
b) Identify five major Chinese Policy Goals contained within the PRC Law Sino-Foreign joint ventures, and the reasoning that would lie behind them.
The Policy Goal 1: Setup some rules to attract foreign investors
For example, Article 1 says PRC permits foreign companies to establish Joint Venture (JV) in China. At here the foreign investors may think: ‘ok, that is good for us since China has a huge market. Let’s have a look deeply.’ And then, Article 2 tells that no expropriation in China (if it happens, government will pay compensation). The foreign investors will be happy to hear this rule. After that, Article 3 and Article 4 come out more detail establishment rules like: ‘3 months to get an authority or approval’, and ‘the form of JV should be Limited
Before and after joining in WTO, China has liberalized aspects of its regulation to conform to international standards.
First aspect is the law that China permits wholly foreign owned operations in its territory. The Joint Venture now is an important vehicle for foreign investors to obtain Chinese market sensitivity, capability, and experience.
Second is the capital source control. The JV in China can borrow capital funds from banks outside China.
Third is the company management method. The chairperson and deputy chairperson shall be selected by equity joint venture partners through consultation or election. And these two positions will be filled by different partners.
Forth is that China requires JVs to provide assistance to the union organization establishment.
Fifth is the foreign exchange control. The employee in JV can remit their money (income after tax) abroad.
Sixth is the way to solve arguments between partners in JV. The dispute will be handled by the board of directors. If fail, it will go to the Chinese arbitral body or an arbitral body which agreed by all parties of a JV.
b) Identify five major Chinese Policy Goals contained within the PRC Law Sino-Foreign joint ventures, and the reasoning that would lie behind them.
The Policy Goal 1: Setup some rules to attract foreign investors
For example, Article 1 says PRC permits foreign companies to establish Joint Venture (JV) in China. At here the foreign investors may think: ‘ok, that is good for us since China has a huge market. Let’s have a look deeply.’ And then, Article 2 tells that no expropriation in China (if it happens, government will pay compensation). The foreign investors will be happy to hear this rule. After that, Article 3 and Article 4 come out more detail establishment rules like: ‘3 months to get an authority or approval’, and ‘the form of JV should be Limited