The rate of increase of foreign direct investment (FDI) has slowed and its proportion of totalinvestment in China has declined.

This brief adopts a neo-institutional approach to derive some generalizations about how China’s policies are enforced, why enforcement remains such a problem, and what foreign firms can do to meet the challenges provided by China’s enforcement regime.

In particular, the brief draws on the protection of intellectual property rights to illustrate the following.

The reform of the urban housing system, begun in the late 1980s, has resulted in a general improvement in accommodation for most of the urban population in China. In less than twenty years, the government managed to provide new and reasonable quality owner-occupied housing to as much as 80 per cent of the urban population. This achievement was made possible by the transition to a market economy and the rapid economic growth that followed.

For the past 20 years, China has embarked on a multi-track programme of reforms to build a bankruptcy system. The passage of an Enterprise Bankruptcy Law in 2006 (2006 EBL) represents a milestone, but there is still a long way to go.