The People's Republic of China (PRC), with a population of 1.2 billion people, is the world's largest emerging economy. In order to develop the national economy, PRC has reinforced and will continue to expand the areas of utilizing foreign investments. Foreign investments are particularly encouraged in the following areas:

1 . Infrastructures, key industries and technological upgrading of existing enterprises. Examples include construction of power plants, highways, wharfs and industrial parks.

2. Capital and technology intensive industries including energy, raw materials, components and parts, instruments and high-value-added, export-oriented industries.

3. Service industry including finance, banking, commerce, tourism and real estate.

In addition to the special economic zones (SEZs), coastal open cities and other regions with preferential tax treatments, PRC will further promote its border areas and will expedite the process to open inland provinces and autonomous regions. Examples include the opening and development of Shanghai Pudong District as the prototype model.

B. Development and revisions of the foreign investment policy

1. To encourage foreign investments and promote the service industries including finance, banking, commerce, tourism and real estate, PRC has relaxed its regulations on these industries.

2. Before 1988, "joint ventures" and " cooperative production" were the main forms of foreign invested enterprise. However, a giant step has been taken since 1988 and foreign business have been allowed to set up wholly foreign-owned enterprises and shareholding corporations. Corporations are also allowed to issue B-type share certificates.

3. PRC has amended its Joint Venture Law. Now a foreigner can hold the post of the Chairman of the Board of Directors of the joint venture.

4. PRC has, in recent years, decentralized its control in regulating and approving foreign investments. Now the provincial governments at the coatstal areas can approve projects with investment up to US$30 million while governments of inland provinces and autonomous regions can approve projects with investment up to US $ 10 million.