Foreign Direct Investment in China

By Phillip Donald Grub; Jian Hai Lin | Go to book overview
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3
Investment Policies and Incentives
Factors affecting an investment environment are numerous. First and foremost, a stable political situation, a stable social order, and consistent policies to attract foreign capital are essential. There should also be good profit-making opportunities--a prime concern of foreign investors--the legitimate rights and interests of foreign entrepreneurs should be protected, and incentives should be offered.The investment policies and incentives provided by the Chinese government are generally positive and flexible depending on the particular investment and where it is placed. Covering a wide range of areas, they include:
1. variances in the degree of foreign ownership
2. flexible project duration
3. free choice of investment sectors
4. flexible size of investment project
5. free choice of investment location
6. lower corporate tax rates
7. flexible policies on land use
8. relatively flexible management, employment, and wage systems
9. flexible policies on product pricing structures
10. variable terms for financing and remittance of profits

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