[Wogef]

>This is not true. Wholly foreign owned enterprises have existed in China for many years, and their permissible activities have increased greatly over the last 5 years.

The letter of the law is never the actual implementation of the law here. Wholly foreign owned enterprises are tolerated up until there is a Chinese company in competition- then you get raided by the police in the early AM and find yourself on CCTV for “Tricking the Chinese People”. You’ll be allow an exit provided you sell your business for pennies on the dollar to your direct Chinese competitor. Yes, even if you speak, read and write Chinese, yes, even if your Chinese wife negotiated for you, yes even if you have a dozen Chinese lawyers and a contract. China as a system has zero interest in protecting the interest of foreigners- and you will always be such because they have no interest in immigration in any form.

The ONLY interest China has in foreign companies is for capital and as a vehicle to transfer IP. Once they have that- the company will be shown the door. Happens over and over again but Western companies persist in thinking they will be the exception.

I’ve lived in China for over a decade, I love it here, but without exception every foreigner I know here who has attempted to start a business was screwed in the end. Rich Chinese know this and most do everything they can to do business only with foreigners and earn their money overseas.

[westiseast]

Totally agree. I think it's sometimes surprising and/or unbelievable to people without experience of China that their history/culture/politics is so exclusive and that people would behave this way. Most of the high speed train network was built on foreign technology and expertise, but contractors I knew working on that project regularly had their apartments broken into (with nothing taken but the laptop) and half of their job was trying to stop their chinese counterparts stealing their IP (anecdotally of course). This kind of activity has been a mainstay of the China miracle the last 30-40 years

[crystaln]

What you say is also largely true. However you can in fact have a foreign owned enterprise and operate, at least until you come on the wrong radar.

The original statement, "Any commercial company operating in China needs to have 51% Chinese participation." is entirely not correct. And even with 51% Chinese participation, a foreign partner is likely to be screwed in the end.