Basic Facts about Yiwu
Yiwu is located in the central area of Zhejiang province with a total land area of 1,105 square kilometers. The whole city governs 8 towns and 5 subdistricts, has a population of 670,000 registered as local domiciliary and 600,000 as external temporary. Yiwu has a long history. It was in the 25th of Ying Zheng of Qin Dynasty (B.C. 222), was in Wushang County, in the 7th of Wu De of Tang Dynasty (A.D. 624), and was changed as Yiwu, in 1998, when it was established as a City. From old times, Yiwu has gained the honor of being the Home of: Culture, Luo Binwang - one of the Four Outstanding Persons in Early Tang Dynasty, Zong Ze - the famous Anti-Jin General of Song Dynasty, and Zhu Danxi - one of the four famous doctors of Jin and Yuan Dynasty. In modern times, Yiwu has produced educationist Chen Wangdao, literature theorist Feng Xuefeng and historian Wu Han, among others.

Since the reform and opening policy, Yiwu has resolved to execute the development strategy of Building the City by Prospering Commerce unswervingly, using the commodity industry as a leader to drive regional economy, and become a large market city and strong economy city from a traditional agricultural small county. In 2002, the whole city realized a domestic gross value of production of RMB15.6 billion Yuan and a total financial revenue of RMB1.66 billon Yuan. Financial institutions have outstanding of deposits of RMB29 billion Yuan, and farmers average net incomes of RMB5688 Yuan. In 2001, the Yiwu general economic index was 19th of all counties (cities) of the whole country. Furthermore, in recent years, Yiwu has been listed as one of the counties (cities) of leading the modernization in Zhejiang, one of the key regions of boosting urbanization in Zhejiang, and one of the first groups of strong counties (cities) of the expanding economic management authority. Currently, Yiwu is one of the regions with the most development active in Zhejiang. Even in the whole country, Yiwu have successively gained such honors as being the National Technical Project Advanced City, National Sports Work Advanced City, National Culture Work Advanced City, Zhejiang Civilized City, Zhejiang Educational Strong City, etc.. Furthermore, it has been awarded the National Double Support Model Cities Award four consecutive times.

Forms of Investment

Sino-foreign Joint Venture Enterprises
Sino-foreign joint venture is also called a stock-style jointly-managed enterprise. It is an enterprise jointly invested and managed by foreign companies, enterprises and other businesses or individuals together with Chinese companies, enterprises or other businesses on China's territory. The special character of such enterprises is that the two sides make joint investment and practice joint management while they will together run the risk, and be responsible for the profits and losses in accordance with the proportion of the investment they make. Each side of the joint management can make its investment with currency or with buildings, machines, site usage right, industrial property right or exclusively-possessed technologies, whose values will be calculated. The proportion of foreign investment should not be lower than 25 per cent. The organizing form of a Sino-foreign joint venture is a limited-liability company with board of directors as its organ of supreme power.

Sino-foreign Co-operative Enterprises
Sino-foreign co-operatively managed enterprise is also called a contract-style jointly managed enterprise. It is an enterprise jointly invested or run according to co-operative contracts by foreign companies, enterprises and other businesses or individuals together with Chinese companies, enterprises or other businesses on the Chinese territory. The investment made by the Chinese and the foreign sides is generally not divided into investment proportions and profits are not distributed according to their investment proportions, either. The jointly signed contracts clearly stipulate the rights and commitments of both sides including investment or co-operative conditions, profits or distribution of products, responsibilities for risks or losses, the style of management and the ownership of properties when the contracts expire. Generally speaking, in a Sino-foreign co-operatively managed enterprise, foreign co-operators provide all or most of the capital while the Chinese side provides land, workshops, useful equipment and facilities and sometimes a certain amount of capital. If the contracts by the Chinese and foreign partners stipulate that all the assets and properties of the enterprise will belong to the Chinese side when the contracts expire, the foreign side can retrieve its investment during their co-operation.

Wholly Foreign Owned Enterprises
A foreign enterprise is an enterprise with sole foreign capital. It is an enterprise established within the boundaries of China and in which all the capital is invested by foreign investors, who might be foreign companies, enterprises and other businesses or individuals.

Representative Office
A Chinese representative office (RO) is an office of the foreign enterprise established in China for liaison with Chinese businesses and customers on behalf of its parent company. A RO is not considered to be a separate legal entity. It must be emphasized that a representative office may not carry out direct revenue earning business activities. For example, it cannot enter into purchase/sales contracts and cannot receive payment for services, issue invoices. However, a RO can open bank accounts and employ staff to maintain liaison with customers and suppliers. Its headquarters can also enter into contracts with its supplier/customers in China in its own name, but not in the name of its RO. Therefore, before a foreign investor establishes its presence in China using wholly foreign owned enterprise (WFOE) such as equity joint venture, cooperative joint venture or a wholly foreign- owned enterprise, it could first set up a representative office to test the Chinese market.