JOINT VENTURE INVESTMENT IN THE PEOPLE'S REPUBLIC OF CHINA: A CONTINUING CHALLENGE

Abstract

The author in this article examines the emerging and evolving legal framework for equity joint venture investment in the People's Republic of China (PRC). Problems that lawyers, investors and businessmen will encounter in the establishment of the joint venture in China are highlighted. The article focuses on the establishment, management and control of the joint venture; pricing and marketing constraints; transfer of technology; labour laws and regulations; loan and banking provisions; insurance; and taxation. Related areas such as China's massive bureaucracy and dealing with the Chinese government are explored. The author concludes that despite the many uncertainties that still surround investment in China and the problems that the legal framework poses, the Chinese have made a serious effort to structure a legal climate that will be conducive to foreign investment. The potential access to one billion consumers and the PRC's proximity to southeast Asian markets suggests that notwithstanding the legal and business problems encountered, in the long run investors will be richly rewarded.