Thirdly, I would like to critically discuss the important factors concerns with import and export controls. As we are undoubtedly aware that both Chinese government and British government are trying their best to protect their native industries. However, when we analyse it in details, it is not difficult for us to realise that the specific industries they protect are wholly different. So it is very significant for the investors to distinguish them clearly. According to the British policy, the follow two products are highly restricted by the government. One is “Agreements with a large number of countries restricting trade in steel products” and the other one is “Agreements under the Multi-Fibre Agreement affecting textile and clothing imports from countries with low labour costs.” Similarly, Chinese government also protects its weak industries, such as primary products, movie industry and so forth. The investors should be very careful when they want to set foot in these restricted industries. Once they break the rule, they will be trapped into troubles, i.e. “the industrial and commercial administrative organ can order it to cease operation or even evoke its business license.” Generally speaking, I believe that it is a good policy because it can successfully protect the weak national industries in order to guarantee the smooth increase of overall economy. So the foreign investors are highly supposed to negotiated with experienced Chinese investment advisors about this topic in details and then make their investment plan.
Next, I would like to argue the differences of foreign investors’ benefits between China and the UK. In the UK, the preferential policy is nationally, i.e. the British government is in charge of publishing the relevant policies. For example, the British government prescribes that if the foreign investors establish companies in less develop areas, such as Cornwall, Merseyside and so on, they could enjoy a discount when they purchase fixed assets and get a considerable amount of grant-in-aid regularly. In contrast, China does not have an official organ to manage the overall policy and the rights have been distributed to every provision. It means that, if a foreign investor plans to establish a factory in Shandong provision, he could enjoy some specified preferential policies that are quite different from the other provisions. This character is decided by the large area of Chinese mainland. So the government of each provision will publish its own equivalent policies to the foreign investors. However, it seems a little bit difficult for the foreign investors to decide which provision they choose because there are more than 30 provisions and each of them has quite different preferential policies for them. So I would like to suggest the foreign investors to compare and contrast each provision’s preferential policies carefully and choose the provision that is good for the growth of their business.
Last but not least, let us discuss the competition legislation. In the UK, there is an organisation named competition commission that is in charge of “investigate and monitor proposed mergers and take-overs of large businesses and to ensure that any businesses with monopoly power do not act against the public interest.” However, in China, anti-monopoly movement is still stand on the start line, i.e. no act is enacted yet in this area. Then, in some particular circumstance, it may seriously undermine the Chinese economy. For example, most of the Chinese telecommunication industry is controlled by the China Telecom nowadays and it is a little bit difficult for the other small telecommunication company to survive, such as China Unicom and Railcomnet. So when the foreign investor plans to set foot in China, they should analyse the current and future situation carefully.
In fact, there are some other important differences in legal aspect of business environment between China and the UK and both of the two governments change their policies to foreign investment continuously. For example, Chinese government will publish an anti-monopoly act soon as well as the foreign investment act will be partially modified this year. So, try to keep the step with the latest news is the most important thing for the foreign investors to do nowadays.
All in all, from what I discussed above, we may safely arrive at the conclusion that the legal aspect of Chinese business environment is quite different from the British one. However, if foreign investor could follow the relevant policies, they will enjoy their Chinese adventure and make a considerable amount of profit.
(1089 Words excluding reference)
Bibliography:
1. Trade Regulations <2002> Worldwide Regulatory Update
Available at: < >
2. Investment Latest News <2002> China Internet Information Centre
Available at: < >
3. The legal environment <2000> S-Cool Limited.
Available at: < = >
4. Law of the People’s Republic of China on Sino-Foreign Cooperative Enterprises <2002> China Internet Information Centre
Available at: < >
5. Experience – Investment <2001> Chinese Embassy
Available at: < >
Reference:
Law of the People’s Republic of China on Sino-Foreign Cooperative Enterprises
Available at: < >
Trade Regulations <2002> Worldwide Regulatory Update
Available at: < >
Law of the People’s Republic of China on Sino-Foreign Cooperative Enterprises
Available at: < >
The legal environment <2000> S-Cool Limited
Available at: < = >