The foreign capital enterprises mentioned in this Law refers to enterprises established in the territory of China with all their capital exclusively invested by foreign investors.
In order to create a favorable investment environment and to encourage overseas firms to invest in China, since the year of 1979 the Chinese government has gradually set up a relatively complete legal system.
This Law is formulated to expand economic cooperation and technological exchange with foreign countries and to promote the joint establishment, on the principles of equality and mutual benefit, by foreign enterprises and other economic organizations or individuals and Chinese enterprises or other economic organizations.
Joint ventures established within China's territory should be able to promote the development of China's economy and the raising of scientific and technological levels for the benefit of socialist modernization.
Foreign-funded enterprises engaging in business in the People's Republic of China must abide by Chinese laws and regulations and must not harm the social and public interests of China.
This Law applies to foreign trade and the protection of trade-related aspects of intellectual property rights. For the purposes of this Law, "foreign trade" refers to import and export of goods and technologies and the international trade in services.
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