Wholly owned subsidiaries of foreign companies and wholly owned companies can be incorporated in China. The investor will be responsible for capital and input costs, marketing, and management of the venture, which runs for an agreed period. Profits after tax can be remitted overseas. The Chinese enterprise provides the land, factory buildings, and labour services for a foreign firm, which provides equipment, capital, and technical expertise. The period of investment is shorter than those for the above methods, usually five to seven years, and the flexibility and short period make CJVs popular with foreign investors.
Joint explorations are a form of cooperation seen in the joint exploration for offshore oil.
During the two stages of exploration and extraction the Chinese and foreign partners take different levels of risk. For example, in the exploration stage, the financial and other risks lie with the foreign party, whereas in production, both sides contribute to the business. The foreign investor receives payment in the form of the goods produced by the enterprise in which an investment is made. This is a form of counter-trade akin to barter, but it may also include payment in the form of other goods bearing no relation to the original venture or equipment supplied. It is popular with the Chinese government as it avoids excessive payments of foreign exchange.