For inbound investors, navigating the maze of available structures can be tricky. The development of the PRC Anti-monopoly Law has led to more scrutiny of acquisitions of Chinese companies, causing potential foreign investors to look at other ways of investing in the country; Danone's experience with Wahaha has in turn revealed potential pitfalls for joint ventures. This month China Law & Practice asks three specialists the pressing China question:

How should foreign investors choose the best investment vehicle?

The international perspective

The Danone/Wahaha case is a high-profile reminder that thorough pre-investment negotiations are fundamental, as is the subsequent nurture of business relationships. The case does not indicate that Sino-foreign joint ventures are no longer good investment vehicles. As always, the investment vehicle of choice remains a question of each investor's objectives and what is permitted under Chinese law.

Anti-trust filings have been required since 2003, and the Ministry of Commerce (Mofcom) has long had discretion not to approve specific transactions (as demonstrated by the Carlyle/Xugong case). Broadly, the Anti-monopoly Law (AML) introduced two things on becoming effective in August 2008: firstly, new merger control thresholds; secondly, express powers to impose conditions, sanctions and remedies.