User:ChristianXBB

Evolvement of Chinese Capital Market

The first step in liberalising foreign investments in China, was the Equity Joint Venture Law issued in 1979 and the establishment of four Special Economic Zones (SEZs) in the provinces of Guandong(Hong Kong) and Fujian on the south eastern coast. The constitution of 1982 recognized the role of private business, and provided them with protection of their lawful interests. This spurred a growth of non-state owned firms, such as town and village enterprises, and joint venture with foreign capital. The latter within the SEZs. In 1984, 10 other coastal cities were added to the SEZ, and the trend continued troughout the 80’s opening more and more regions to foreign investments. Adapting to the increasing number of privately owned firms, the Preliminary Regulations for Private Business(more than 8 employees) were issued in 1998, in addition to the new State Enterprise Law, which recognized State Owned Enterprises(SOEs) as legal entities separate from the state. To ensure accountability of SOE management, system of contract responsibility was introduced. In addition, new laws and regulations were passed in order to encourage foreign direct investments(FDI). Up until 1991, the yearly growth rate of FDI was 20 per cent.

To be Wikified.