ABSTRACT
This chapter illustrates various entry modes of investment available to foreign companies entering China. It provides some practical advice on entry strategies for international executives active in the Chinese market. The chapter presents a comparison of financial and operational characteristics between joint ventures and wholly foreign owned subsidiaries. It discusses sharing arrangements and focuses on the impact of equity distribution on the performance of international expansion in China. Entry modes available to international trading businesses include conventional import and export, flexible trade, international leasing, and counter-trade. The equity joint venture (EJV) form provides foreign companies with long-term connections to the Chinese market. Many foreign companies are seeking greater flexibility of operations in China's market. Comparing financial and operational characteristics of different entry modes, especially EJVs and wholly foreignowned enterprise, is essential. China is by far the biggest and most impressive economy of the developing countries.
