Passage 11Foreign manufacturing business in China falls into one of the three categories: foreign equity joint ventures, foreign cooperative joint ventures, and solely owned foreign investment enterprises. To these foreign investments are added direct investment in bonds or shares. Selling is done through a joint venture partner whose business license allows sales within China. Sourcing in China involves a contract agreement with a Chinese partner in order to guarantee quality control and product availability.2Direct investment in China may be supplying equity for joint venture projects, buying stocks in a joint stock limited company, and buying bonds that are floated for large infrastructure projects, for example. The rate of return on bond investment can be between 15 percent and 17 percent for a 15-year period; however, the investment is not returned.3The first step in entering China for business is to identify one's own company's needs. China is not the right environment for every kind of foreign business. Foreign companies also need to identify goals:(1) to sell to China;(2) to buy from China;(3) to manufacture in China for export only;(4) to manufacture for domestic markets.4The next step, if the goal is buying, selling, or forming a joint venture, is to identify a partner. The choice of a partner is extremely important and can be accomplished in several ways. Chinese consulates and embassies can offer information about potential partners. Consulting firms in China and abroad can also identify potential partners. Chinese government commissions that approve foreign investment, such as the Shanghai Foreign Investment Commission, can provide lists of partners. Delegates from China may travel to a foreign firm's head office and initiate talks about partnership.5The third step is to find out about these potential partners, usually by having one's own representatives meet with the Chinese in China. Good research is important. Key factors are the Chinese company's experience with foreign joint ventures and capability in the business. Foreign firms do not usually have more than one partner for each project.6The fourth step involves three major documents. The first is a Letter of Intent that establishes the agreement reached between partners to work together to accomplish the goals of both sides in this partnership. This is recommended for the linkage between foreign buyers from China with an import-export agent that will oversee the buying, as well as for joint venture partners for marketing and manufacturing. When the partners plan a joint venture company they will next have Articles of Association or a Charter drawn up, detailing how the new company entity will be structured. This leads to a joint venture contract. It may have appendices that specify other specific contract agreements, such as intellectual property rights, patent rights, and export numbers. The documentation is often prepared for foreign companies by foreign law firms operating in China.7The fifth step in a joint venture is a feasibility study. This document, approximately 20 pages long, follows a specific format and is really a joint justification study, signed by both partners. The feasibility study must be performed by a Chinese-approved organization, usually a consulting firm in China. In some cases, an environmental impact study is part of this step.8The final step is approval resulting in the business license. Businesses must operate strictly within the scope specified in the business license. It is renewed every year.9Within each industry there are specific requirements for the business license as well. Of course, once authority is given for the joint venture to exist, the company has to implement the approvals. This usually results in further negotiations between partners.10Chinese law. China's legal system is slowly beginning to develop, but it is still in the early stages. The new Company Law, effective July 1, 1994, is the first of its kind since the establishment of the People's Republic of China in 1949. Previously, foreign investors had to rely on vague rules cited by officials and on hearsay from other foreign firms' experiences , now they can base their decisions on this law, adopted at the Fifth Session of the Standing Committee of the 8th National People's Congress. The Company Law governs all limited liability and joint stock companies, including those with foreign investment.11Accounting. Accounting practices are not universal in China; the kind of organization - equity joint venture, cooperative joint venture or solely owned foreign investment enterprise — will determine how accounts are kept. Foreign-investment manufacturing firms are not subject to import duty if their products are exported. Duty-free havens exist to encourage manufacture-for-export by foreign-investment enterprises.12Marketing. Marketing inside China is very difficult for foreign firms unless they are joint venture partners of Chinese firms already involved in domestic marketing. Distribution channels usually coincide with the governmental administrative regions. Transportation and telecommunication infrastructures limit development also. Nevertheless, the market is so enormous that even one region is enough to sustain a business. Consumer demand for commodities and services is great. Manufacturers can sell with very little promotion, but at the same time name recognition is very important for the appeal to status that is a characteristic of Chinese culture. Billboard advertising is effective, along with television commercials.13Financing. Financing of foreign business in China may take several forms. Wholly foreign investment enterprises usually export to a subsidiary or trading company in another country. The total investment in joint ventures is registered capital (equity) plus circulating funds (debt). Debt-equity ratios are published and conform to levels set by China. The equity often comes from the foreign partner and working capital from the Bank of China .In large projects, companies can go public. Some enterprises in China float bonds; in 1993 convertible bonds appeared, convertible into common shares. One successful example is the Shanghai Pinkerton Float Glass Plant.14"Equity joint venture operations allow either partner to bring anything into China without duty. Labor is not equity; when the contract is being negotiated, each side inflates its contribution. In a cooperative joint venture, only things used specifically for production are duty free.
What does the author mainly discuss in Para. 13?
A、Shanghai Pinkerton Float Glass Plant.
B、Wholly foreign investment enterprises usually export to a subsidiary or trading company in another country.
C、Some enterprises in China float bonds.
D、Financing of foreign business in China may take different forms.
【正确答案】：D
【名师解析】:在第13段中，作者主要讨论了在中国进行外国业务的融资方式。这包括独资外国企业通常如何向其他国家的子公司或贸易公司出口，合资企业的总投资是如何由注册资本（股权）加上流动资金（债务）组成，以及债务-权益比率是如何公布并符合中国设定的水平。此外，还提到了外国合作伙伴通常提供股权，而中国银行提供运营资金。在大型项目中，公司可以公开上市。一些中国企业发行债券；1993年出现了可转换债券，可以转换为普通股。上海品瑞浮法玻璃厂就是一个成功的例子。因此，正确答案是D，即在中国的外国业务融资可能采取多种形式。
