| In you are establishing a company in China, the | | | | supplier channels; |
| Chinese government will require you to prepare a | | | | -organizational structure of the new enterprise |
| Feasibility Study Report in order to obtain | | | | and the reasons for it, including total number, |
| approval for your project. This is basically a sales | | | | composition and recruiting sources for employees, |
| job designed to persuade the government that | | | | departments to be established, and management; |
| your project will be good for China. | | | | -selection of equipment and manufacturing |
| It bears emphasizing that two versions of the | | | | processes, and the reasons therefore (including a |
| Feasibility Study Report are generally required - a | | | | classified list of domestic equipment and |
| preliminary report early on, and a full report later | | | | equipment to be imported); |
| on. Listed below are the contents of a full report, | | | | -modes of construction, construction schedule, |
| which can be simplified for the purposes of | | | | and an explanation thereof; |
| providing a preliminary report. Its purpose is to sell | | | | -a discussion of environmental protection, labor |
| the project to the examination and approval | | | | safety, and health care issues; |
| authority by demonstrating its benefits to the | | | | -structure of foreign exchange balance and |
| Chinese economy and providing evidence of the | | | | reasons therefore, and statement of planned |
| investors' ability to carry out the project. | | | | export percentage of the new enterprise's |
| (1) Proposed name of the proposed enterprise, | | | | products; |
| legal address, scope of business, and scale. | | | | -fundraising methods, including building and |
| (2) Names of investors, countries of | | | | equipment as capital investment, and calculations |
| establishment, legal addresses; name, position, and | | | | therefore; |
| nationality of the new enterprise's legal | | | | -composite analysis of benefits and foreign |
| representative, and (in the case of Joint | | | | exchange revenues and expenditures using the |
| Ventures) the name of the administrative bureau | | | | dynamic, risk, or sensitivity method (including |
| supervising the Chinese partner. | | | | economic, technical, financial and legal analysis) |
| (3) Details of proposed investment funds | | | | Appendices: |
| (self-owned funds, loan capital, investment | | | | (i) written comment on planned site selection and |
| proportion, form of investment - such as cash, | | | | Letter of Intent confirming the supply of utilities; |
| equipment, etc., investment contribution schedule), | | | | (ii) authorization documentation of the legal |
| and (in the case of Cooperative Joint Ventures) | | | | representatives of the investors (foreign |
| profit and loss sharing ratio among the partners. | | | | investors should have their documents notarized |
| (4) Term (duration) of the new enterprise. | | | | by home country authorities and authenticated by |
| (5) List of persons responsible for preparing the | | | | a Chinese embassy or consulate in its home |
| Feasibility Study Report. | | | | country); |
| (6) Summary and conclusion (including problems, | | | | (iii) opinions of the examination and approval |
| issues, and suggestions). | | | | authority regarding the funds to be contributed by |
| The final Feasibility Study Report should also | | | | the Chinese partner (for Joint Ventures); |
| cover the following issues: | | | | (iv) annual financial reports, including balance sheets |
| - production plans and their basis, with an | | | | and profit and loss statements of each investor; |
| explanation of market demand both in China and | | | | (v) an approved (standardized) Environmental |
| abroad, and how the market survey was carried | | | | Impact Statement if the project will have |
| out. Similar facilities already existing or being built in | | | | significant environmental impact (ex: construction |
| China or abroad should be mentioned and | | | | and renovation projects). The standardized form |
| commented upon; | | | | is available from the local, provincial, or national |
| - selection of the location of the project and the | | | | Environmental Protection Bureau (depending on |
| reasons; necessary supplies of utilities and | | | | which level of government examines and |
| telecommunications facilities, and a description of | | | | approves your project), and must be approved |
| the present situation; | | | | by them. |
| - sources of raw materials, amounts needed, and | | | | |