Market Entry into China (According to case study finish a Report) Essay

Market Entry into China (According to case study finish a Report) - Essay Example China becomes a hot favourite for investment in the sectors of cooperative enterprises, joint ventures. â€Å"According to Zhang (2005), the impact of the overseas Chinese on China’s FDI inflows can be seen at least in two ways. First, the overseas Chinese invest in China based on language and historical bonds; accordingly they possess advantages in operations in China. Second, the overseas Chinese act as a bridge through which foreign investors understand the Chinese culture.† (Devinney et al 2010). The country, however, did not allow solely foreign-owned ventures earlier, and they had limitation of technological support. This situation has now changed and through export from other countries they now have all the infrastructural facilities. China has now removed many limits, which were also different from their WTO promises and encouraged foreign-owned ventures to guide in higher technology and add to their export quantity. Thus, only foreign-owned enterprise under joint venture model is the most accepted structure of FDI in China. There are a mixture of FDI available in China and the most common among them have been the Equity Joint Venture, Co-operative Joint Venture, and, to rising quantity, completely Foreign Owned Enterprise. However, they have a viable system of legislation and ground rules for creating such ventures and suitable government approvals and business licenses are mandatory. Hong Kong and East Asia are the main sources of FDI in China. Presently Taiwan is also a major source of China’s FDI with increasing amount of investment. Taiwan positions as the second place of FDI in China. â€Å"During the past two years, the government has been working to reform the foreign investment approval system. The approval procedure for five categories of foreign investment has now been vastly simplified, as the central government has allocated significant approval power to its local counterparts.   For foreign investment projects with