With the hype of trade war between China and the United States, China passed the new Foreign Investment Law on March 15, which will go into effect Jan. 1, 2020. Although the details of this law are still cloudy to the foreign business community, it seems that the intention behind the law is to welcome more foreign investments into China. Foreign investments into China have been increasing in the last five years, mostly through corporate stock purchase. With the passing of the new Foreign Investment Law, more foreign companies and individuals, including many from the United States, are interested in learning about the market and opportunities in China. Many consider China as a high-risk market with potential higher return. However, the reason that most people hesitate about investing in China is their fear of the unknown. We have worked with various brave businesses and individuals with their investments and expansion into China over the years and have witnessed how they overcome fear and challenges and achieve successful results in their ventures. This article focuses on a high-level discussion of some key factors to consideration when investing in China:

Establish China-Oriented Strategies

The strength of U.S. businesses as a whole is their understanding of the importance of having well-established business strategies. However, developing business strategies for the U.S. market versus cross boarder investments are completely different because there are many additional considerations when investing in China that would not be otherwise needed for the U.S. market. For example: • How and when money can flow in and out of China; • Effect of currency exchange rate; • Potential cross boarder tax consequences; • Types of projects or companies in China in which foreign entities can invest; • Political and global economic climate; • Differences in the investment cycle and expected return; and • Effect of the differences in the legal system.