ABSTRACT
One of the ongoing trends in business in China is the tendency for foreign companies to establish wholly owned subsidiaries there rather than setting up joint ventures with Chinese companies or institutions. The Chinese government classes these two alternative vehicles for entry as wholly foreign-owned enterprises (WFOEs) and joint ventures (JVs), and we will use that classification here. There is no doubt that the former are becoming much more popular. One reason, of course, is the progressive relaxation of restrictions on WFOEs, and it is now possible to set up a wholly owned subsidiary in almost any sector or location. The question is, do you wish to do so? Is a WFOE the best option, or will a JV be more effective?
