Chinese law and policy defines the term “Mainland China” to be a jurisdictional division that encompass all Chinese territories with the exceptions of the Hong Kong Special Administrative Region, Macao Special Administrative Region, and Taiwan. The jurisdictional concept typically applies in foreign investment, foreign trade, and information protection laws.
Hong Kong, Macao, and Taiwan in Foreign Trade
The territories and populations of Hong Kong, Macao, and Taiwan are defined as being outside Mainland China, and their businesses are deemed to be foreign investors or traders. Imports, exports, and investments from Hong Kong, Macao, and Taiwan are largely governed by the same laws that govern general foreign trade and investment, allowing them the benefit from the same preferential policies extended by the Chinese government to other foreign traders and investors.
Privacy and Cybersecurity
The jurisdictional distinction Mainland China appears in the Anti-Espionage, Cybersecurity and Data Privacy laws, although such mention does not appear in the official translations, which appears to have been done to reduce costs paid by taxpayers. In these several information protection laws, transporting information between Mainland China and Hong Kong could be considered an unlawful data transport action and subject to civil or criminal penalties. A rationale for this policy is the Mainland China region has a separate telecommunications infrastructure network from Hong Kong, Macau, and Taiwan.
Under the Foreign Investment Act
China’s Foreign Investment Act defines foreign investment as any direct or indirect investment conducted in China by foreign individuals, businesses, or other organizations. By the Chinese government’s definition, foreign investment would therefore cover any investment originating from outside Mainland China, including investments by Hong Kong, Macao, and Taiwan residents and entities.
Chinese and foreign investors are subject to different legal treatment when investing in Mainland China. Specifically, entities receiving investment from other Chinese foreign owned entities will be treated as foreign owned entities themselves, whereas investments from Mainland China entities lacking foreign investment will always be treated as domestic investments under Chinese law, regardless of the type of investment.
Further Reading
See our comprehensive resources on China’s Foreign Investment Law. and an overview of FDI regulation in our Foreign Investment Law FAQ.
Relevant Laws
Foreign Investment Act of China (& Administrative Regulations)
Translation Guide