Question

Assume you are the global marketing manager for an Irish technology company that wants to enter the Chinese market. Assess the political, legal, and regulatory issues your company must consider. Determine if your company should proceed with entering the Chinese market. Explain.

Answer 1

The irish company should take care of the following things before setting up an enterprise in china.
In June 2017, the National Development and Reform Commission in association with the Ministry of Commerce had promulgated an updated version of the Catalogue of Industries. The 2017 Catalogue proposef a negative list. All industries unlisted in the negative list are permitted to foreign investment and those Industries subject to the "special administrative measures for the access of foreign investments" are still to be approved by ministry of commerce .

2. Legal system
China has a civil law system, consisting of statutes, administrative rules and regulations. In addition, the Supreme Court of China issues judicial interpretations which the lower courts must follow in adjudicating cases. Instead of this China does not have a federal system like the US.
Foreign investment
3. Are there any restrictions on foreign investment ( authorisations of central or local government)?
Since 1995, foreign investment in China has been regulated by the Catalogue of Industries for Guiding Foreign Investment .
In accordance with the latest Catalogue issued in 2017 and the 2018 Negative List, foreign investment is classified into four categories:
Encouraged. This category includes 348 industries, such as: fruit and vegetable drink production; agricultural machinery manufacture; and development and manufacture of software products.
Investments are restricted in sectors include 21 industries, such as:
domestic water transportation;
construction and operation of civil airports;
insurance companies or securities companies .
Prohibited businesses are not open to foreign investment which include 27 industries like
air traffic control;postal companies, domestic express delivery of letters; and
consulting of Chinese legal affairs. So the enterprise started by the irish company should be in the permitted category

4 There is no restriction on doing business with certain countries or jurisdictions except for those subject to international sanctions imposed by the UN. However, investments in certain countries or jurisdictions by Chinese domestic entities require the approval of the chinese central government.