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Over the last few years, China has experienced an unprecedented surge in foreign investment in high-polluting industries, from power generation and petrochemical refinement, to metallurgy and machinery manufacturing. A number of landmark projects have achieved financial closure just over the past year, while an additional $100 billion in foreign debt and equity is slated for key infrastructure areas during the Ninth Five-Year Plan (1996-2000). At the same time, however, there is a relative dearth of systematically compiled information to guide foreign investors in the highly legislated area of environmental protection. In the past three years alone, there have been more than 350 environmental laws, regulations, and directives enacted in China. As a result, Pollution Control in the People's Republic of China: An Investor's Guide comes as a welcome addition to the literature.

This book delivers just what the title promises: a concise, if general, guide that leads the investor through the PRC environmental planning and control maze. The book consists of seven chapters, covering the Environmental Impact Assessment (EIA) process, enforcement means, media-specific regulations, and general liability issues. The volume's technical appendices, meanwhile, include various PRC forms and standards.

The strength of the volume lies in the clear and concise manner in which it explains key regulatory processes and provides background on various technical areas. Chapters 4 and 5 present readable overviews of the EIA process and the Three Simultaneous Points Policy, China's key environmental planning and monitoring strategy requiring approvals at the design, construction, and commercial operation stages during the development or renovation of a pollution source. On the technical side, chapters 6 and 7 address the manner in which China approaches the regulation and control of key pollutants and other media of environmental degradation, including water and air discharges, solid waste, and noise and land degradation. These chapters include flow charts, technical references to relevant pollution classifications, and discharge standards. The volume concludes with a general discussion of "Environmental Liabilities and Issues for the Investor," covering civil, administrative and criminal liabilities, and general pointers on dealing with the regulators.

Though clear and readable, the volume omits a layer of detail about critical issues arising in local and industry-specific practice, as well as specific legal and administrative issues. For example, many of the key capital construction industries have their own set of environmental regulations guiding permissions and discharge standards. This omission may, however, simply reflect a statement of the complexity, fluidity, and flexibility of the system. In addition, the chapter on liability issues does little to clarify issues for banks and financial institutions that are concerned with the environmental aspects of lender liability. But, overall, Pollution Control in the People's Republic of China is a helpful resource that would be a good addition to the bookshelves of foreign investors and their advisers alike.

--Mitchell A. Silk

Mitchell A. Silk is an attorney with Allen & Overy in Hong Kong and co-author of Environmental Law and Policy in the People's Republic of China. Ann M. Weeks

Touching on everything from advertising rates to port development to selection of wholesalers, this research report, written by two Asia-based consultants, provides a useful overview of the challenges facing foreign companies selling their goods in China. Perhaps inevitably, its broad scope--and the tendency of most multinationals to consider any information regarding their distribution networks as highly confidential--has meant that some sections are much stronger than others. Nevertheless, the authors do a good job of drawing on other sources to illustrate their assertions. Distribution in China seems geared toward consumer goods companies, though firms in industrial sectors may find helpful the chapter on physical distribution, which contains some excellent updates on China's infrastructure development plans.

The most interesting information in the report comes from the results of a December 1996 EIU survey of 72 foreign-invested enterprises. The survey revealed that a majority of respondents found distribution costs in China more expensive than in their home countries (most respondents were US- or EU-based companies, roughly split between consumer and industrial product manufacturers). Nearly half reported that more than 5 percent of all their outstanding accounts are "doubtful," and 20 percent of consumer-goods respondents reported bad debt balances as high as 10-20 percent of sales. Such information can prove valuable to foreign firms looking to benchmark themselves against others in the China market. Newcomers will find the study provides a good checklist of issues to consider when setting up supply chains, even if there are disappointingly few details on how to operate such chains effectively.

The report gives little attention to such topics as how foreign companies can or should structure distribution activities of multiple ventures. But Distribution in China is timely and easy to read, and despite its hefty price tag, offers welcome insights into how to sell goods in China.

--Pamela Baldinger

Pamela Baldinger is director of the US-China Business Council's Hong Kong office.