Investment Opportunities in China

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Protection of Foreign Investment

Bilateral Investment Conventions Signed By China
China has signed bilateral agreements for investments with several countries.
To see the list of the countries, click here.
To see the conventions, click here.
International Controversies Registered By UNCTAD
Organizations Offering Their Assistance in Case of Disagreement
CIETAC , The International Commission of Economic and Commercial Arbitrage
ICSID , International Center for settlement of Investment Disputes
Member of the Multilateral Investment Guarantee Agency
China is a signatory of the Convention of MIGA.

Country Comparison For the Protection of Investors

  China East Asia & Pacific United States Germany
Index of Transaction Transparency* 10.0 5.2 7.0 5.0
Index of Manager’s Responsibility** 1.0 4.5 9.0 5.0
Index of Shareholders’ Power*** 4.0 6.3 9.0 5.0
Index of Investor Protection**** 5.0 5.3 8.3 5.0

Source: Doing Business

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

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Procedures Relative to Foreign Investment

Freedom of Establishment
Varies according to the sector. Necessity to submit its 'business plan' for prior approval to setting up.
Acquisition of Holdings
The acquisition of majority interest in a local company is authorized in China according to the sectors.
Obligation to Declare
The agency for promotion of foreign investments in the country facilitates getting information on authorizations necessary for setting up.
Requests For Specific Authorizations
Necessity for all projects to submit a business plan subject to approval by competent authorities.
Find Investment Service Providers in China on

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Office Real Estate and Land Ownership

Possible Temporary Solutions
Rental and Business center. Purchase by foreign companies is subject to restrictions.

-         Telecommunications
-         energy
-         environment
-         high technology
-         services

The Possibility of Buying Land and Industrial and Commercial Buildings
Not possible to buy land in China. Only a right of use of 50 to 70 years can be approved.
Risk of Expropriation
The risk of expropriation is high. The law envisages a compensation but no indication is given on the amount or its calculation.

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Investment Aid

Forms of Aid
Foreign investors enjoy corporation tax reductions, exemption of tax on dividends repatriated during a period and other tax advantages
The Ministry for Foreign Trade and Economic Cooperation (MOFTEC) can be contacted for any information concerning opportunities in China.
Privileged Domains
China especially encourages overseas investments in high technology, appropriate energies and the sectors with export oriented activities.
Privileged Geographical Zones
The government has created various zones, granting each tax exemptions or tax incentives to attract overseas investments. They are primarily the 5 special economic zones and the 14 coastal cities.
The special zones are Shenzhen (at the border of Hong-Kong), Zhuhaï (close to Macau), Shantou, Xiamen (vis-à-vis Taiwan) and the island of Hainan. They were selected because they were completely under-developed.
Les 14 coastal cities are Dalian (in the province of Liaonong), Shanghai, Ningbo, Wenzhou (in the province of Zhejiang), Fuzhou (in the province of Fujian), Guangzhou, Zhanjiang (in the province of Guangdong), Beihai (in the autonomous region of Guangxi Zhuang), Tianjin, Yantai, Qingdao (in the province of Shandong) and Lianyungang, Nantong (in the province of Jiangsu). Since a few years, other cities are also regarded as coastal towns profiting from the same status. Unlike the 5 special zones, which were not underdeveloped, but key industrial centers in China. Overseas investments made it possible to improve the infrastructures and create new, more advanced ones.
Free Zones
3 Free zones also exist in Shanghai, Tianjin and Shenzhen where imports are free of all customs duties and taxes provided no goods produced inside the zone are resold on the local market. Bonded warehouses, trading companies and production intended for export are authorized there. In addition 2 other zones exist in the same regions (Export Processing Zones) also enjoying exemptions from customs duties, but in which trade activity is not authorised.

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Investment Opportunities

The Key Sectors of the National Economy
Agriculture, breeding, forestry and fishing, extraction, manufacture and services.
High Potential Sectors
Chemical industry, insurance and bank, high technology, renewable energy, environment.
Privatization Programs

-       Telecommunications
-         energy
-         environment
-         high-technology
-         services

Tenders, Projects and Public Procurement
Chinabidding, Tenders in China
Tenders Info, Tenders in China
Asian Development Bank, Procurement Plans in Asia
DgMarket, Tenders Worldwide

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Sectors Where Investment Opportunities Are Fewer

Monopolistic Sectors
-         weapons

-         telecommunications

-         energy

-         environment

-         high- technology

-         water supply

-         electricity distribution

-         services

Sectors in Decline
The manufacturing sector with low added-value suffers from rising prices of transport and competition of the other Asian countries (e.g. Vietnam). These products are less competitive.

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