| Preface | xi |
| Acknowledgments | xv |
1 | Gauging the New Chinese Marketplace | 1 |
| Introduction | 1 |
| Why Study the Expatriates? | 3 |
| A Methodology for Drawing upon Expatriates' Insights | 4 |
| Questions Needing Answers | 8 |
| Results | 15 |
2 | Foreign Enterprise Establishment in China | 17 |
| Introduction | 17 |
| The Investment Regime | 21 |
| Challenges for Foreign Investors | 30 |
| Analysis | 75 |
3 | Foreign Enterprises and Human Resources | 85 |
| Introduction | 85 |
| Human Resources and Establishment: Pressures Shaping the Labor Contract | 89 |
| Human Resources after Establishment | 98 |
| Analysis | 115 |
4 | Running a Productive Plant | 121 |
| Introduction | 121 |
| Productivity | 122 |
| The Foreign Experience | 126 |
| Analysis | 152 |
5 | Ex-Factory China: Distribution, Marketing, and Services | 159 |
| Distribution Rules: A Domestic Trade Policy | 159 |
| Foreign Investors and Distribution | 167 |
| Analysis | 193 |
6 | Of Laws and Privileges | 197 |
| Introduction | 197 |
| China's Legal Environment | 199 |
| The Expatriate Experience | 203 |
| Analysis | 223 |
7 | Conclusions and Policy Recommendations | 231 |
| Conclusions | 233 |
| Implications | 252 |
| Appendices | |
Appendix A. | "Catalogue for the Guidance of Foreign Investment Industries" | 259 |
Appendix B. | Methodology | 279 |
| References | 293 |
| Index | 303 |
| Boxes | |
Box 2.1 | Project finance and the approval authorities' perspective | 54 |
Box 2.2 | The incentive pendulum swings | 64 |
Box 2.3 | Technology Digestion and Acquisition | 74 |
Box 3.1 | The importance of localizing management | 95 |
Box 5.1 | Distribution feedback leading to efficient production | 162 |
| Tables | |
Table 2.1 | US-China trade, 1980, 1985-97 | 18 |
Table 2.2 | Japan-China trade, 1985-97 | 19 |
Table 2.3 | China's top trading partners, 1996 | 19 |
Table 2.4 | Number of FDI contracts by enterprise form, 1979-97 | 27 |
Table 2.5 | FDI in China, 1991-97 and 1979-97 | 34 |
Table 2.6 | Enterprise forms, 1997 | 49 |
Table 2.7 | Japanese enterprises in China | 57 |
Table 2.8 | Average capital of FIEs in China, 1979-97 | 59 |
Table 2.9 | Roundup of issues: establishment | 76 |
Table 3.1 | Employment of Chinese by foreigners, 1980-96 | 87 |
Table 3.2 | Unemployment estimates | 90 |
Table 3.3 | Overtime at a southern China FIE, 1997 | 97 |
Table 3.4 | Local managers' salary increases, 1996-2000 | 99 |
Table 3.5 | Average annual pay at FIEs, October-December 1996 | 101 |
Table 3.6 | Per capita income by area, projected | 103 |
Table 3.7 | Per capita GDP by province, 1996 | 103 |
Table 3.8 | Personnel overhead expenses: contribution of an FIE in Shanghai | 106 |
Table 3.9 | Roundup of issues: labor | 116 |
Table 4.1 | Total factor productivity growth in China's state and collective industries, 1980-92 | 124 |
Table 4.2 | China's imports, first quarter 1998: SOEs vs. FIEs | 127 |
Table 4.3 | Exports of FIEs, 1985-96 | 128 |
Table 4.4 | China's trade: comparative advantage | 130 |
Table 4.5 | DCAC: one year's forecast vs. actual demand, 1996 | 139 |
Table 4.6 | Overcapacity? The case of the auto sector in 1996 | 142 |
Table 4.7 | Expanding service operations of a joint venture in Tianjin, 1994-97 | 151 |
Table 4.8 | Roundup of issues: productivity | 154 |
Table 5.1 | Distribution infrastructure growth: structure of freight volume by transportation type, 1978-96 | 176 |
Table 5.2 | Infrastructure development under the Ninth Five-Year Plan, 1996-2000 | 177 |
Table 5.3 | China's retail structure, 1980-96 | 178 |
Table 5.4 | Retail structures in five selected markets | 178 |
Table 5.5 | Roundup of ex-factory issues | 194 |
Table 6.1 | Round of issues: law | 227 |
Table 7.1 | Roundup of FIE issues | 233 |
Table 7.2 | High priority, policy-related issues | 253 |
| Figures | |
Figure 2.1 | Foreign direct investment in China, 1991-97 | 18 |
Figure 2.2 | Comparison of commercial regimes, APEC and China | 26 |
Figure 2.3 | Strategic trade-offs in the establishment process | 29 |
Figure 2.4 | FDI in China by location, 1996 | 40 |
Figure 2.5 | Approvals for new FIEs by organizational form, 1990-97 | 48 |
Figure 3.1 | Managers' salary increase, 1996-2000 | 100 |
Figure 3.2 | Per capita GDP by province, 1996 | 104 |
Figure 4.1 | FIEs in China's trade, 1980-96 | 135 |
Figure 4.2 | DCAC: One year's forecast vs. actual demand, 1996 | 140 |