China is the world’s most populous nation. By 2006 China's estimated population was 1,313,973,700. In terms of land mass, the total area of China is 9,571,300sq km (3,695,500 sq mi) including inland waters, it is about the same size as the United States, but its population is almost five times of the US. Approximately 60% of the people live in the rural area. Since 1979, China also has been implementing the family planning policy (one-child system) in order to maintain a low birth rate. This one-child policy actually allows for two or more children under some circumstances.

Representative Offices (ROs) are one of the most popular and low-cost form of foreign presence in China. The RO is an excellent means by which foreign investors can explore the Chinese market and search for business opportunities before they consider committing significant resources and become further involved in the Chinese market. The following cases are ideal situations that may suggest a foreign company to set up an RO in China.

Equity joint ventures (JVs) are the second most popular in which foreign companies enter the China market and the preferred manner for cooperation where the Chinese government and Chinese businesses are concerned. Joint ventures are usually established to exploit the market knowledge, preferential market treatment, and manufacturing capability of the Chinese side along with the technology, manufacturing know-how, and marketing experience of the foreign partner.

Wholly Foreign Owned Enterprises (WFOEs) become one of the investment options for the foreign investor wishing to process, manufacture or assemble in China. It is not necessary to find a Chinese partner and does not require large amounts of registered capital to fund as well. Although WFOEs are essentially to be used for facilities involving production lines, they have under certain conditions also proved suitable for service industries with some restrictions over location.