ABSTRACT
This chapter analyzes how the Chinese state maintained its interests with regard to two of the most sensitive issues involving foreign investment: the hiring of Chinese labor, and the repatriation abroad of profits earned in China. The many laws, regulations, and policy statements issued by Beijing since 1980 in general terms endorsed the principle that Chinese-foreign joint ventures could recruit their own labor. China's official policy explanations fudged the issue to leave the state some flexibility in bargaining. Chinese foreign investment law therefore leaves unclear how free joint ventures will be to extend their employment offerings into domestic labor markets. After the hiring of Chinese labor by foreign capitalist ventures, the most sensitive issue concerning foreign investment is how freely foreigners can produce and sell goods in the domestic market and take the net profits out. The signs of disappointingly limited technology transfer occurring through foreign investment indicate that the government may have gone too far.
