The PRC is often criticised as being foreign investor unfriendly and as maintaining barriers to foreign investment. However, the independent data tells a different story: According to the World Bank’s “ease of doing business” surveys the PRC had jumped from number 78 in the world in 2017 to number 46 in 2018. That is a remarkable jump. It must be indicative of real commitment on the part of the Chinese government to “open up” the PRC’s economy.
In his presentation Francois emphasised that if you do business in the PRC, you are a guest of the PRC and it is important to play by your host’s rules. He also spoke on the following topics:
The challenges (perceived or real) of doing business as a foreign investor in the PRC;
The difference between trading with the PRC China and doing business and establishing operations in the PRC;
The categories into which the PRC’s economy is divided (“encouraged”, “permitted”, “restricted” and “prohibited”) and how that determines the rules for foreign investment into the PRC;
Popular investment structures used by foreign investors in the PRC; and
The PRC’s new “Foreign Investment Law” that is scheduled to take effect in 2020. That Law should open up the PRC’s economy event more.
Francois emphasised that the bottom line about investing into the PRC is that you must first do proper (in fact, extensive) market research, conduct proper due diligence (commercially, financially, regulatory, legal and culturally) and learn, and respect, the Chinese culture. Most importantly, you must get specialist and competent local advice and support in the PRC – do not try to do this alone.