Rapid Download Squad

The pitfalls of the Sino-foreign joint venture in China are well documented. For many foreign business people in China, the phrase conjures up all manner of frightening images, from disregarded contracts and foot-dragging partners to stolen trademarks, embezzled funds and bitter lawsuits.

However, since more industries became open to 100 percent foreign ownership in the late 1990s, it has become an accepted truth for many that investing through a wholly foreign-owned entity, or WFOE (pronounced “woofie”), is preferable in any sector in which foreign direct investment (FDI) is not restricted. The numbers show a clear trend: Utilised FDI has declined steadily over the last 10 years – roughly since restrictions on many sectors were removed – while so-called “organic” investment through WFOEs has soared (see graphs). [Download]