"Chinese-foreign cooperative venture" (hereinafter referred to as cooperative venture) is formed by signing a contract through consultation of concerned parties from China and other countries or regions. The contract shall define clearly the rights, obligations and interest distribution to each party. The difference of each party of a cooperative venture do not have to be in the form of equities, and the share of profits, losses and risks are all stipulated in the contract. It is a contractual cooperative enterprise.
"Wholly foreign-owned enterprises" refer to enterprises in China established by foreign companies, enterprises, economic organizations or individuals with funds entirely of their own. They are also called "enterprises exclusively run with foreign funds." All the profits made by a foreign enterprise goes to the foreign investors.
"Compensation Trade" In this form, foreign businessmen provide the equipment and technology, and are committed to buying back from the Chinese party a certain amount of products for export. The cost for equipment and technology may be paid back in installment. If an agreement is reached between the Chinese and foreign parties, the cost for the imported equipment and technology may be paid back with products other than that turned out by the said equipment and technology.
"Processing and Assembling on Order" In this form, the foreign party shall provide technology, equipment, parts, raw and accessary materials, and buy back the products. The Chinese party shall receive conversion charges. The equipment supplied by the foreign party may be priced and paid back by the Chinese party with the income from conversion charges in installment.
"Leasing" is a special way of raising funds to obtain right to the use of foreign equipment. The rent is paid in accordance with stipulations in the leasing contract. After the leasing period expires the lessee may buy the equipment. The foreign party, or the lease holder, may also supply technical service, raw materials, fuel and spare parts.
"Chinese-foreign joint venture" (hereinafter referred to as joint venture) is one to which each party's contribution is decided through consultation and clearly defined in the contract. The venture shall be jointly invested, jointly managed, and the parties shall share its risks, profits and losses. Generally, the ratio of foreign investment to total registered capital shall not be less than 25 %. Each party's investment can be in cash or in the forms of premises, factory building, equipment, machinery or other materials, industrial property, patented technology and right to land use. A Chinese-foreign joint venture is a limited enterprise of share ownership with the status of legal person. Shareholding corporations shall be tried out. 