FDI Trends In New Era

Ever since the enactment of the first Chinese foreign direct investment law - Law on Sino-Foreign Equity Joint Ventures in 1979, foreign direct investment ("FDI") has had near forty years of development in China. In 1980s and 1990s, the craze was to set up Sino-foreign joint venture enterprises. After China joined the World Trade Organization in 2001, the tide turned into setting up wholly foreign-owned enterprises ("WFOEs"). In the immediate aftermath of the 2008 financial crisis, FDI experienced a freezing period. As the crisis passed, FDI activities resumed. In the recent years, FDI is experiencing new developments as a result of the reform of Chinese FDI regulatory regime and the revision of Catalogue of Industries for Guiding Foreign Investment taken place from time to time, the rise of cross-border mergers and acquisitions of Chinese enterprises, and the gradual maturity of domestic A-share capital market.