Organizations Involved in Foreign Investment
Foreign investors face a confusing array of administrative organizations and financial institutions in China, all of which have at least partial responsibility for the development and operation of foreign investment projects. Potential foreign investors should familiarize themselves with these organizations and should understand their functions in order to avoid any unnecessary delay costs and mistakes.
Central-level government organizations, in general, have local, provincial, and municipal equivalents with similar functions. For example, the Ministry of Finance, a central-level government agency, has a Bureau of Finance in each provincial and municipal government. These bureaus perform functions similar to their central-level government counterparts but bear different responsibilities. In general, the Ministry of Finance is responsible for all financial matters on a national level, while the individual bureaus are in charge of the financial matters of their respective provinces.
Whether foreign investors should approach the central-level ministries or the local bureaus for help usually depends on the scale and location of the investment project. For example, the municipal governments of Shanghai, Beijing, and Tianjin have the authority to decide on investment projects of up to US $30 million without further permission from the central government. Other cities, such as Guangzhou and Shenyang, can only decide on projects valued under US $10 million. Smaller cities have the right to decide on projects valued under US $5 million.
In order to approach the right agency from the very beginning, before negotiations begin with a Chinese partner, the foreign investor should understand whether the proposed investment project must be approved by a central government organization or by a local one. Foreign investors