Hastings International and Comparative Law Review


Bryan Powell


Wholly foreign-owned business enterprises have been allowed in the People's Republic of China since 1980, but the Chinese Government did not promote their use. This situation changed in 1986, when the Government promulgated the Foreign Enterprises Law, which provided the legal framework for establishing foreign enterprises without a Chinese partner. This Note examines the Law's effectiveness in expanding foreign economic cooperation. It initially discusses the background of equity joint ventures and wholly foreign-owned enterprises in enterprises in China. The Note then examines the Law in depth to determine if its implementation will encourage foreign investors to establish wholly owned enterprises in China. Finally, the author compares the two forms of equity investment available to foreigners-equity joint ventures and wholly foreign- owned enterprises-and weighs their advantages and disadvantages.