The second session of the Fifth National People’s Congress of Mainland China on July 1, 1979 issued the Joint Venture Law. This law opened the door to the private investment of Western firms in Mainland China. The new joint ventures are novel undertakings, which have in the past been precluded by the vast differences between Communist China and Western nations in terms of ideology, economic legal systems, and property structures.
This paper seeks to explore the foreign investment policies of Communist China placing special emphasis on the new joint ventures. What operational difficulties will these joint ventures encounter in the short term? How will be the joint ventures effect the overall Chinese economy in the longer term future, and what specific roles will joint ventures assume in the future? . We have found that the stability of foreign investment policies in Mainland China is dependent upon which leaders hold power. Thus future stability is related to future leadership change. Moreover, the measures promoting foreign investment in Mainland China and particular those concerning wages and rents, are not as attractive as has been expected by some people. We conclude that the progress of joint ventures in Mainland China will be slow.
