Abstract
A first glimpse of the People’s Republic of China (“China” or “PRC”) China reveals an underdeveloped industrial base, a repressive Marxist-Leninist-Maoist government, a pervasive and all-encompassing bureaucracy, a fragmentary legal structure, and an economic system that has adopted a few of the good and many of the bad lessons of capitalism. But with an economy predicted to be the world’s largest by the year 2010, investors from the far corners of the earth have been flocking to set up joint ventures, wholly foreign-owned enterprises, and foreign banks.
American companies, however, have been relatively slow to take advantage of new investment opportunities in China. Perhaps, as a wise man once said, “The only thing preventing Tzu-lu from applying what he had heard was the fear that he needed to hear something more.” This article endeavors to provide the requisite “something more” to enable U.S. bankers to make informed decisions about the type of financial institution to establish in China.