China’s murky ownership rules: Who owns what? | The Economist

What. A. Mess.  Nonetheless, I’m sure it’s just the beginning. The Chinese Government is not content unless it is exerting complete control. – winner-winner, chicken dinner 🙂

OWNERSHIP is rarely straightforward in China. After Mao Zedong died and land was opened up for commercial development, each plot came with only a 50-year government lease. No one knows what will happen when those leases expire. Yet building projects continue apace.

Foreign investors face a similar conundrum. Several Chinese industries, such as mining, steel, education, telecommunications and the internet, are both capital-hungry and politically sensitive. They need foreign investment, but the law bans foreigners from owning stakes in them.

Eager investors and canny locals have found ways around the rules. Perhaps the most important is the creation of a complex investment vehicle called a “variable interest entity” (VIE).

via China’s murky ownership rules: Who owns what? | The Economist.

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