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It's a myth. It depends on what the company does.

Internet services? Yes, you need a domestic partner, because you'll disseminate information to the public.

If you're in the automobile industry, you can import cars to China. China was Porsche's largest market until 2025, and all Porsches are imported. It used to be that a Chinese partner is needed to manufacture cars in China, but Tesla did not need one, and that policy was dropped. Anyway, it's nowhere close to the complete ban the US placed on Chinese cars.

In many other industries, you can create a foreign-owned company and operate in China.