KEY METHODS OF DOING BUSINESS

The water market in China is big and demand is increasing year by year. Since 2003, China has opened municipal utilities to private and foreign capital in the hope of increasing public services and cutting government management costs. The Government will gradually change its role from direct control to policy maker. The method mostly recommended by the government for investment is Build Operate Transfer (BOT). So far, foreign investors have been involved with a number of BOT projects but they have had their problems. There have been disputes over ‘rate of return’ between local governments and foreign companies. Water supply and wastewater treatment projects are planned and managed by localities too and some local governmental departments such as local construction commissions or public utility bureau. There have been cases to date where promises made to foreign companies cannot be kept because they went against national policy. Without legal documentation that complies with national policy, any potential court case will be difficult and investors may stand little chance of winning.

When considering doing business in China, it is essential to obtain legal, financial and taxation advice in advance, and extremely helpful to work with a local partner who has experience and connections in the market. A contact list of lawyers and other relevant professional bodies as well as further information on other sectors in the country is available from the British Embassy Beijing and the consulates in Guangzhou, Shanghai, Chongqing, and Hong Kong.