China requires special consideration for a number of reasons. With 1.2 billion people, it has the world's greatest population, is the second largest economy adjusting for purchasing power, and is projected to become the largest by around the year 2020 (World Economic Forum 1999). The country's sheer scale and diversity make it an economic region in its own right. China's political economy is also quite distinctive. It is pursuing its own mode of transition from socialism through policies and institutional arrangements that are to a large extent sui generis. 1 This transition includes a progressive engagement with international business.
China's scale and growing involvement with international business mean that it cannot be ignored, even though the ideological and institutional differences between China and other major economic powers create numerous difficulties. The protracted negotiations over China's entry to the WTO bear witness to the problem. As an environment for foreign-investing firms, China presents an unusual degree of complexity and uncertainty that does