Abstract
Since 2001, when China joined the WTO, foreign investment enterprises in China have grown considerably and exhibited significant developmental trends. In response, the Chinese government has been trying hard to reform its laws to keep pace with market developments. This ar- ticle will undertake a political economy analysis to tease out the interplay and relevance of contextual factors contributing to the quality and direc- tion of legal change in this area, giving important insights on how the social, political and economic conditions in China combine to shape China’s legal regime for foreign investment enterprises. It will focus on the practical problems arising from the troubled relationship between the general company law and the specific laws for foreign investment enterprises. The political economy of law reforms suggests that although evolutionary trends point towards convergence in the long term, the dual systems of foreign investment regulation are likely to persist, at least to some degree, in the foreseeable short term.