Regulations for Pilot Trade Joint Ventures in China

People familiar with China will know that sino-foreign joint ventures have been limited to areas of manufacturing or services and have not generally been permitted to carry on trading activities except ancillary to such primary objectives. There was therefore a considerable interest when it was announced earlier in 1996 that the Chinese government would permit the establishment of trading joint ventures to allow certain specified sino-foreign joint ventures to carry on trading activities and be set up primarily with these objectives in mind.

The Provisional Measures for the Pilot Sino-foreign Foreign Trade Joint Ventures (the "Measures") was promulgated by the Chinese Ministry of Foreign Trade and Economic Co-operation (MOFTEC") and came into force on 2 September 1996 The Measures set out certain qualifications and requirements for sino-foreign joint ventures formed to can on import and export business ("Trade JV") as well as for both Chinese and foreign Trade JV parties. As the