Relocation of FIEs' Sites in China

When investing in China, choosing a work site is an issue of critical importance for foreign-invested enterprises (FIEs) that will be engaging in manufacturing activities. Different sites in China often have significant variances in tax structure, infrastructure, labour supply, and regulatory enforcement. Naturally, foreign investors prefer to retain a site that allows for continuous and long-term optimisation of their business operations. However, a recent trend shows several cases where China's local governments have asked FIEs to relocate their facilities for reasons of 'public interest' such as urban planning. This trend will likely continue in line with the high levels of development planning for China's major cities. This article focuses on China's legal framework for the relocation of urban properties, as well as the compensation schemes that are currently available.