Developments such as those outlined above will likely continue as China's application to the WTO has stalled while it continues to raise its domestic industries to world production and technology standards. China appears willing to wait until it can enter the WTO under the less demanding standards reserved for developing countries. The formation of joint ventures and strategic alliances between Western enterprises and Chinese aerospace-defence and advanced technology firms raises difficult questions in regards to issues such as national security and economic sovereignty. It is possible that China, with its liberal credit policies for unprofitable SOEs, could yet suffer the effects of the economic downturn that has recently plagued its Asian neighbours. While China is still intent upon attracting foreign investment, its specific policies on tax incentives, foreign exchange liberalisation, and legal reform continue to evolve and often appear contradictory at different enforcement levels and regions.
Various ministries continue to undertake restrictive, secretive industrial plans.
China has a history of sudden political shifts that are not concerned with business stability. Economic risks could include economic cycles varying between the past overheated economy and inflation to a potential recession following the current situation of most of Asia, central government planning priorities restructuring, and fluctuations in foreign currency exchange policies. Chinese business partner risks include the level and reliability of guanxi political connections it can provide, having the required capital resources, and its business and technical expertise and key managers and executives. However, a high level of risk and a constantly changing business environment with potentially large payoffs are factors that attract patient foreign firms who are not fainthearted to China. Jane's Information Group.