Essay on Foreign Investment in China: The Variable Interest Entity

At first these plans along with an extremely ingenious propaganda campaign stirred great optimism and productivity within the Chinese people, but as years went by the initial flare and excitement went out and few of these promises, reforms and goals had been reached. In some cases the promises were lies. The real actions of the Communist party showed quite a different picture than the lie of democracy that it was feeding the people. The new government never was a democratic one. As a matter of fact it was a dictatorship controlled by the China’s Communist Party (CCP). Throughout the years the communist government consistently and cruelly suppressed any attempts for the country’s democratization.

“The Party: The Secret World Of China’s Communist Rulers,” by Richard McGregor is a book which provides detailed insight into the Communist Party of China, revealing many of the secret underpinnings of how the party is run, and explores the question of how they have continued to stay in power for so long. While other strong socialist powers, such as the Soviet Union and Eastern Germany, fell at the end of the 20th century, the CPC was able to stay in control and ultimately come out of that period even stronger. In McGregor’s own words “the party picked itself up off the ground, reconstituted its armor and reinforced its flank. Somehow, it has outlasted, outsmarted, outperformed, or simply outlawed its critics, flummoxing the pundits who have predicted its demise at numerous junctures.” Instead of letting its own ideologies weaken its power, the CPC has continually adapted and transformed its policies and goals in order to maintain their stronghold over the nation. Through his impressive list of Chinese scholars and political contacts, McGregor is able to lay out the fundamental workings inside the Chinese government and the impressive actions they’ve taken to remain such a powerful organization.

Using Russia; their situation, principles, and perhaps mistakes, as a comparison, we can see how communist China has differed and therefore maintained stability. Several social, political, and economic factors have contributed to China’s stable communist regime and decrease the likelihood that it will succumb to a democratic transition. Therefore, it is with my professional opinion that as long as China’s society remains relatively divided yet content, political actors and institutions abide by political rules, and the economy continues to thrive, China’s regime will remain fundamentally

Australia has always leaned heavily on China as a key trade partner China being the fastest growing nation creating the need for raw materials. A key investor Australia remaining as Chinas preferred investment Candidate. As well as a labour market offering cheap labour to Australian businesses, large commodities buyer and limited taxation and an average of 50% cheaper materials. Creating a heavy reliance on China showing that ultimately Australian businesses would not be able to survive leading to catastrophic events such as recession.

China’s new communist party general secretary Xi Jinping raised hope for a change in the communist party’s relationship to the law back in December of 2012 when he called for full implementation of China’s state constitution and declared that, “No organization or individual has the special right to overstep the constitution and law, and any violations of the constitution and the law would be investigated.” Xi has also repeatedly mentioned the need for the Party to police itself rather than allowing any outside body to do so. The Chinese communist party dominates state and society in China. Its power rest on four pillars: its control of China’s approximately 2.25 million person-strong military, the People’s liberation army, its 1.5 million person-strong paramilitary forces, the people’s armed police, and it’s 800,000 other internal security forces. The people’s liberation army is not a national army belonging to the state. Rather it is an armed wing of the communist party, with the party’s exercise of absolute leadership over the military. The national people’s congress oversees the state council, as well as four other institutions: the presidency, the supreme people’s court, the public prosecutors’ office, and the military(Lawrence&

The People’s Republic of China (PRC) has experienced unprecedented economic growth under the leadership of the Chinese Communist Party (CCP) since 1978. In his speech “The Present Situation and the Tasks Before Us,” Deng Xiaoping emphasized the importance of economic reform: “The superiority [of the socialist system] should manifest itself in many ways, but first and foremost it must be revealed in the rate of economic growth and in economic efficiency” (Deng 1980). With this explicit commitment to growth, Deng links the political legitimacy of the CCP, as the monopolist of power within the PRC, to economic performance. Therefore, the inevitable economic slowdown in the PRC will undermine the legitimacy of the authoritarian CCP and force political liberalization.

China has had a long and rich history that is not devoid of its fair share of revolutions and political upheavals. It is these changes that have increasingly shaped the country into becoming one of the major economic powers of the current decade. This has also given the country a greater standing when considering the political influence that the country now enjoys in the global environment. One may consider the period that span three decades from 1890 as having the greatest impact in the trajectory that modern day has taken in the past and is going to take in the future. This period saw a number of very significant changes both in ideology and belief that provided china with the opportunity to take a new direction. One that was separate

The government of china is very keen to encourage foreign investors, because foreign companies are regarded as relatively good corporate

The purpose of this essay is to show how the economy of China has, and is changing, becoming the second largest economy in the world today. Although China is currently under the leadership of Xi Jinping, this essay will concentrate primarily on the actions undertaken by then President Mao Zedong, followed by then President Deng Xiaoping, (sans mention of Hua Guofeng). Given the relative infancy of Xi’s assumption of power, economic policies still remain largely rhetorical in form. Likewise, the majority of literature concerning economic policies under Xi are largely speculative, often citing strategies and ambitions as opposed to thereby, lacking a solid basis for rational induction In addition to China’s lack of transparency, In addition, it will be shown that the methodology behind the Chinese economy demonstrates the implementation of varying levels of the characteristics associated with the schools of Realism, Marxism and Liberalism. Thus, China’s approach to global trade in the 21st Century is pluralistic, testamentary to the failed economic

(2) Case Study of Li Hoi Shuen v Man Ming Engineering Trading Co. Ltd. [2006] 1 HKC 349

China is an emerging economy that caters number of market opportunities for foreign investment. Moreover, China has a huge potential for economic growth. It is the world’s most populous country. It shares border with fourteen countries. The rapid expansion of Chinese economy has captivated many countries to invest in this market in order to gain profit and enjoy low tax rates. China’s one of the best-known landmarks is the Great wall, one of the world’s largest manmade structures. China is the second largest energy consumer country and third largest energy provider country in the world where coal is the primary source of energy. As far as the political factors of China are concerned China is not dominated by a single or a two party system, it has a multi -party System under the leadership of CPC (communist party of China). In decision making process of the political, economic, cultural and social affairs the other parties express their concerns regarding the particular polices to be adopted but one who rule in all is CPC whose approval is the main concern. Furthermore, considering the political stability of the country, number of foreign investments has been embedded into the country’s economy making it a country, which carries a low level of risks of investments. Consequently, this immense increase in the investment ties back to the increase in political stability of the country.

World's biggest populace and a strange politically-tyrant yet-financially liberal style of administration has given China a somewhat remarkable political environment.  China has depended on a strict arrangement of controls and strategies to direct its monetary area. The normal 5-year arranges direct what ventures will appreciate a superior offer of government support and assets.

From foreign wholly owned enterprise, acquisition, joint venture, to licensing and franchising. Moreover, foreign investors are allowed to make interrelated investments in elderly care in China, which allows them to establish extensive, chained operations. Yet, foreign companies are not allowed to offer services reimbursed through reverse residential house discounting (reverse-mortgage business). Each entry mode has its own benefits and risks, however, based on the interviews conducted and the current situation of the market, joint venture seems to be the entry mode for this market. As it it’s crucial to have a local partner with extensive experience and knowledge to do business in China. Having said this, it must be noted that there is no one approach for all companies to enter this market. Which entry mode a company chooses also depends on the company’s size, culture, organizational goals and vision.

As the three FIE Laws were introduced at the start of China’s reform and opening up, they serve as fundamental laws for foreign investment issues in China for almost 40 years. However, because of the rapid and deeper development of China’s economy in recent years, these laws face a number of issues.

Perhaps the most salient point concerning this top-down ownership and control model is the fact that Ma owns only about 10% of the shares and he will do the decision with the partner. Admittedly, this could lead to instability down the line. But instability is always a potential problem to the company, which given the range of threats to any market-leading company, especially in China. These include aggressive competition and governmental interference in China, and such threats would exist even if Ma owned 90% of the company.” (Borges & Salleh,