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PrefaceIn recent years，China has become one of the world’S leading economic powers(in 20 1 0，it overtook Japan to become the second largest economy on the planet in GDP terms，behind the us)．This economic development took place in the space of over 3 0 years as it has to be remembered that until the end of the 70s，China was closed to the outside world and during that period(first the Imperial reign，then its short experience as a republic，followed by the establishment of the People’S Republic，with The Great Proletarian Cultural Revolution)，commercial relations between China andthe outside world were virtually non—existent．
It should also be noted that following the breakupof the USSR，China repealed a number of the Soviet—inspired laws it had passed and after the CulturalRevolution，China had no legal system for almost 2 0years，which obviously greatly hindered the developmentof the country and its economy．
All of this changed with the reform and opening up of the country instigated by Deng Xiao Ping who，withhis“open door”policy,began，from 1 9 79 onwards，to open China up to the world．This resulted in one of the greatest economic transformations the world has seen in recent times and which radically changed the position of China and the rest of the world．Subsequently,a growing and continuous flow of foreign investment began to enter China，and today it is the second largest recipient of foreign investment in the world．
Growing foreign investment in China has also givenrise to massive legislative developments in the countrywhich has enacted thousands of important laws and rules in recent years，providing commercial transactionswith increased legal certainty．To give you an idea of thescale of the legislative change that has taken place in China in recent times，in the last five years alone Chinahas amended，inter alia，the following fundamental laws：
catalog of foreign investments．
Company law．
Antitrust law．
Bankruptcy law．
Property law．
Real estate legislation．
It could almost be said that in recent years，Chinahas completely overhauled its entire legal system．
Furthermore，China’S entry into the World TradeOrganization(WTO)in 200 1 obliged it to open up itseconomy to foreign investment to an even greaterdegree and left it with no choice but to amend and adapt a significant portion of its laws in order to comply withthe commitments it assumed in the context of the WTO．
Lastly,it must be taken into account that despite all of the abovementioned progress，the Chinese economyis still not fully open to the outside world and，as a result，foreign investors still sometimes find themselves subject to a legislative framework that differs from that applicable to national investors．This，together with the obstacles inherent in a culture and language that are SO different，makes it even more difficult for foreigninvestors to do business in China．
This ad hoc system of rules takes the form of laws and provisions that subj ect foreign investment to administrative authorizations and approvals，registrations，additional requirements and，in some cases，restrictions that allow the Chinese government to control and select the type of investment it wishes to attract．This difference in treatment used to have a positive aspect in terms of the policy on tax incentives for foreign Investment，which the Chinese government applied paradoxically with the aim of standardizing the tax treatment of national and foreign investors until its almost total abolition in January 2008．
In addition to the above，it must be noted that the Chinese legal system，although to a lesser extent than one might think，is influenced by the peculiarities 0I its recent history and current political situation．For example，the ownership of land located in urban areas continues to belong to the Chinese state while land located in rural areas or on city outskirts belongs，in general，to collective economic organizations．Nevertheless，individuals and legal entities can hold a right to use land，(known as a land use right)for a period of time depending on each concession and on the use of the land in question(e．g．residential，industrial or educational)．Moreover,and to greater extent following the reforms of recent years，labor legislation stands out for the protection it affords workers which，in certain areas，even rises above the levels to which we are accustomed in European countries with higher levels of protection．We hope this book will help minimize the difficulties described above，allowing foreign investors in China to reduce the uncertainties that are inherent in a country that is SO different from their own，and at thesame time facilitate trade and investment between Chinaand other countries．
