Abstract
This chapter illustrates the general environment for foreign direct investment in China. It outlines the economic environment and focuses on current and emerging market demands. The chapter provides an introduction to cost and revenue-related issues and highlights tax policies. It discusses environmental factors affecting international investment strategies and presents the legal environment pertaining to foreign direct investment in China. China's open market reform and rapid economic growth have enticed a tremendous surge in activity and market investment by multinational companies. One of China's attractions for Foreign direct investment is undoubtedly its position as a low-labor cost manufacturing site. China has income tax treaties with 42 countries. These treaties generally provide for relief from double taxation. A market economy is not only built upon individual autonomy and decision-making in running enterprises, but also on socially instituted legal systems and property rights.