uring, resource development and services including infrastructure projects (Perkins F, 1997, P185). Generally, foreign investment plays a crucial role in China's rapid post reform growth by transferring capital, technology, training and managerial skills and assisting with product development and market access. The first important thing for foreign investors to understand is China's foreign investment policy: embracing foreign investment as a tool for economic development. Specific policies and regulatory measures are being enacted to facilitate foreign investment in some sectors while limiting it in others. At the same time, however, officials have been instructed to be more selective in approving proposed projects and partners (Economist Intelligence Unit, 1996a).
             Moreover, another crucial question for foreign investors is which political factors may affect the direction and speed of economic developments in the next decade. A gradual consensus has developed within the leadership, the Party and society as a whole that economic reform has delivered tangible benefits and is worthwhile. Meanwhile, leadership recognizes that China needs to maintain relatively rapid growth to avoid widespread unemployment and possible social pressure. The most likely outcome is that present policies encouraging a mixed economy will be maintained (Perkins F, 1997, P62).
             As China continues to open up and internationalize its economy and markets allocate most resources, strong basic economic institutions and effective regulatory systems will be vital for sustainable economic development. While doing business in China remains complex and often difficult, commercial and legal reforms have proceeded relatively quickly leading to a more transparent and predictable environment (Perkins F, 1997, P91). However, some problems in legal system still occur, such as personal intervention and corruption. Foreign investors have limited rights to request a ...