160 Questions Before Investing in a Factory in China

A practical framework for China factory investment due diligence

Before selecting a factory location, ordering equipment or committing capital, turn assumptions into questions that can be answered with project-specific evidence. This framework covers market feasibility, eligibility, costs, land, facilities, utilities and production readiness.

Use a single record for each applicable question: answer, quantity and unit, source document and date, responsible person, uncertainty, action and decision consequence. Distinguish provider statements from verified site and contractual evidence.

The English source edition contains 159 numbered prompts. This web edition preserves those prompts with continuous numbering and adds Question 160 as a final investment decision review.

Market Information

1. 001
   Product definition. Describe the products fully and clearly, particularly any custom-manufactured products, including their functions, specifications, technical parameters and applications.
2. 002
   Product supply. Identify existing sources of supply for the proposed products, covering the past three years and forecasts for the next five years. List local suppliers, agents and distributors, including their names, addresses, production capacities, product ranges and estimated market shares.
3. 003
   Product demand. What are total market demand and supply? Forecast demand throughout the study period, broken down by industry or product, and state projected growth rates for the next five years.
4. 004
   Pricing. List prevailing prices in domestic and overseas markets by major region or city and by ex-factory price. Compare the proposed selling prices with current market prices.
5. 005
   Projected sales and market share. Describe the expected annual sales volume, market share, demand and sales value for each product in each market or region when the plant operates at full capacity.
6. 006
   Transport arrangements. Describe how products will move from the factory through sales channels to end customers. State the number of transport options, the regions and countries served, coverage and advantages over competitors. Explain transport and storage arrangements, how charges are calculated and who pays them.
7. 007
   Marketing. Detail promotional plans and budgets for distributors and end customers separately. Identify the product launch information used to prepare these plans and budgets. Describe each partner's marketing role, historical sales to that partner, its share of worldwide product sales, production capacity and product range.
8. 008
   Marketing management structure. Provide the reviewed organizational structure of the marketing and sales management team and all marketing agreements.

Policy and Investment Eligibility

1. 009
   Is the project's industry included in an investment negative list?
2. 010
   Is the project's industry included in the local prohibited or restricted industry catalogue?
3. 011
   Does the project comply with the industrial park's planning requirements?
4. 012
   Does the project fall within an area designated for environmental or ecological protection?
5. 013
   Does the project fall within a protected forest or grassland area?
6. 014
   Does the project fall under a catalogue of prohibited or restricted land uses?
7. 015
   Does the project comply with the local land use plan?

Investment Incentives

1. 016
   What investment promotion incentives are available at each level of government, from the project locality up to the provincial level?
2. 017
   What incentives are available in the industrial park where the project is located?
3. 018
   What incentives are offered by the local investment promotion authorities?
4. 019
   Have completed and operating projects in the proposed development area actually received the incentives? Verify this through local investigation.
5. 020
   Confirm project-related funding and subsidy policies offered over the past three years by development and reform, industry and information technology, finance, and science and technology authorities at each level up to the province. Identify the timing, payment methods and amounts of support.

Approvals and Permits

1. 021
   Project initiation and land use planningIs the project a new development, an expansion or a technological upgrading project?
2. 022
   Project initiation and land use planningIs the project subject to government approval, ratification or filing? Which local authorities handle each procedure, and what must be submitted or completed for each?
3. 023
   Project initiation and land use planningWhich local requirements apply to energy conservation, environmental impact assessment, pollutant discharge permits, cultural heritage, military interests, social stability, seismic assessment, water resources, soil and water conservation, geological hazards, sterilization of underlying mineral resources, safety, preliminary land review, land reclamation, forest land and trees, road access, flood impact, site selection opinions, meteorology, fire protection, resettlement, occupational disease prevention, lightning protection, water engineering plans, civil air defense approval and aviation obstacle clearance? What are the specific requirements and procedures?
4. 024
   Project initiation and land use planningWhat local procedures govern the grant of land use rights and issuance of the land certificate? Must an interested company sign a backstop agreement with the government and pay an earnest-money deposit, and how much? Can conditions be attached to the public listing? Must at least two parties register for a listed land transaction to proceed? Is demolition or relocation involved? Must the land be delivered cleared, or can it be transferred uncleared, and what rules apply? Is a land grant premium payable for commercial use of titled underground space? What are the payment and handover schedules and delivery standards? Within the plot boundary, does the site meet the local standards for three utility/access connections and site leveling, or eight connections and site leveling?
5. 025
   Project initiation and land use planningWhat requirements does the land use planning permit impose on the project plan, floor area ratio and other indicators? What is the application procedure?
6. 026
   Construction planning and design approvalWhat local rules, fees and timeframes apply to construction drawing review? Are fire protection, environmental protection, safety and occupational health reviewed together? Is review conducted by government or commercial entities, and how many first-tier review organizations are available? What tendering procedures apply to privately funded projects: filing only or an open tender?
7. 027
   Construction planning and design approvalWhat requirements apply to the design, survey, construction supervision and construction contractors? Must they register or file locally?
8. 028
   Construction permittingWhat is the construction permit application procedure, and what prerequisites must be met?
9. 029
   Construction permittingWhat requirements apply to contractor personnel, vehicles and working hours during construction?
10. 030
    Completion acceptanceWhat are the local completion acceptance procedures and timeframes for soil and water conservation, safety, fire protection, environmental protection and occupational disease prevention?
11. 031
    Completion acceptanceAre environmental procedures required before trial production? How are pollutant discharge procedures handled after production starts?
12. 032
    Completion acceptanceWhat permits and certifications are required to manufacture the products, and what are the procedures?
13. 033
    Completion acceptanceAre any other industry entry permits or licenses required?
14. 034
    Completion acceptanceCan title be registered for underground parking spaces locally? Can parking spaces in civil air defense facilities be rented out? Can mechanical parking spaces be titled and sold?
15. 035
    Completion acceptanceWhat is the procedure for registering building ownership? What local rules apply to preliminary and final building measurement surveys? Are recognized surveying organizations government bodies or commercial entities?

Taxes and Fees

1. 036
   Before constructionAre there local government funds or levies, such as price stabilization, flood protection, water infrastructure construction or grain risk funds? If so, what are their rates and assessment bases?
2. 037
   Before constructionIf replacement buildings must be provided as part of redevelopment or resettlement, are those buildings subject to taxes and surcharges? Are they subject to land appreciation tax?
3. 038
   Before constructionWhat is the total land price and its detailed breakdown? Is deed tax included in the land price, and what rate applies?
4. 039
   Before constructionWhat is the advance collection rate for land appreciation tax? Is it collected monthly, quarterly or annually? What rules apply to final settlement? Is cultivated land occupation tax payable?
5. 040
   Before constructionWhat statutory fees, approval and construction application charges, and administrative or public service charges apply? What documents establish the rates?
6. 041
   Before constructionWhat are the tariffs for water, electricity and steam?
7. 042
   Before constructionWhat is the local schedule of construction-related charges? Which administrative charges apply to this project?
8. 043
   Before constructionHow are urban infrastructure supporting charges assessed, including their application to resettlement housing? If payable, what is the unit charge for residential premises, and how is the charge for commercial premises calculated?
9. 044
   Before constructionHow are education infrastructure charges assessed?
10. 045
    Before constructionHow are civil air defense construction application fees, or payments in lieu of on-site civil air defense construction, assessed?
11. 046
    Before constructionHow are gas and water capacity expansion charges and heating infrastructure contributions assessed?
12. 047
    Before constructionDoes the power utility impose a power supply reliability charge?
13. 048
    Before constructionIs a property maintenance fund contribution payable to the housing authority?
14. 049
    Before constructionIs a pooled labor protection contribution payable to the construction authority?
15. 050
    Before constructionCan required landscaping be provided off-site? What fees does the landscaping authority charge?
16. 051
    During operationWhat income tax rate applies? Is the project eligible for local income tax incentives?
17. 052
    During operationIs property tax assessed on the property's original value or on rental income?
18. 053
    During operationWhat rates apply to urban maintenance and construction tax, the education surcharge and the local education surcharge?

Investment and Financing

1. 054
   InvestmentWhat costs are included in local land acquisition? How is the land price composed, and what land grant premiums, taxes and fees apply?
2. 055
   InvestmentWhat are local construction costs for transport, materials, labor and installation?
3. 056
   InvestmentWhat are the equipment purchase, freight and incidental transport, insurance and installation costs, and applicable tax rates?
4. 057
   InvestmentWhat investment is required for office equipment, safety facilities and environmental protection facilities?
5. 058
   InvestmentWhat are the purchase costs of construction machinery, warehousing and logistics equipment, and vehicles?
6. 059
   InvestmentDoes the investment per unit of land area meet local requirements?
7. 060
   InvestmentWhich other project construction costs, known as Category II costs, are payable? What local charging standards apply?
8. 061
   FinancingHow many commercial financing institutions are available locally? For each, what are the guarantee requirements, interest rates, maximum loan-to-investment ratio, principal and interest repayment arrangements, and required equity contribution?
9. 062
   FinancingDoes the project qualify for policy-based loans or interest subsidies?
10. 063
    FinancingWhat financing costs apply in addition to interest?

Financial Assessment

1. 064
   What are the product or service prices? Do they include tax? What are the customer payment terms?
2. 065
   What quantities of raw materials, auxiliary materials and packaging materials are consumed, and at what purchase prices? What are the supplier payment terms?
3. 066
   What are the staffing levels, salaries, benefits and annual working days?
4. 067
   What are the administrative expenses, selling expenses, manufacturing overheads and other related costs?
5. 068
   What quantities of water, electricity, gas, coal and other utilities or fuels are consumed, and at what purchase prices?
6. 069
   What is the expenditure on research and development?
7. 070
   Which taxes and fees apply after production starts, and at what rates?
8. 071
   How much fluctuation in product selling prices and raw or auxiliary material purchase prices can the project withstand?
9. 072
   Can the tax revenue generated per unit of land area meet local policy requirements?
10. 073
    What are the project's profit margin, rate of return, net present value and payback period?
11. 074
    Does the project have sufficient cash flow and debt servicing capacity?

Site Selection

1. 075
   LandWhat rules apply to commercial, research and development, industrial, office and residential land uses?
2. 076
   LandAre the eight required infrastructure connections available outside the plot boundary? If the site does not meet the local three-connections-and-leveling or eight-connections standard, what additional payments are required, how much and when?
3. 077
   LandAre there existing obstacles that must be removed? Are there civil air defense facilities or other underground structures, such as piles, foundations, wastewater treatment tanks or septic tanks? Are there protected buildings, public facilities or supporting infrastructure, such as historic buildings, buildings of special historical significance, civil air defense facilities or substations? Can existing structures be demolished? Is compensation required, how much, and is it included in the land cost?
4. 078
   LandDoes the local government require gardens or trees on the site to be retained or protected? Otherwise, which authorities must approve tree removal or relocation, and are additional fees payable?
5. 079
   LandAre there substations, pipelines or utility lines within or crossing the plot?
6. 080
   LandAre military facilities located across the site or in its surrounding area?
7. 081
   LandDo rivers or streams cross the plot? What are the number, size and distribution of lakes and fishponds on the site? Do water resources authorities require their retention or alteration?
8. 082
   LandWas the site previously occupied by a chemical plant or another potentially contaminating facility? Could contamination affect future development, and has relevant testing been carried out?
9. 083
   LandAre road widening, elevated road or underpass projects planned around the site? Are vehicle access points permitted?
10. 084
    LandDoes the plot fall within a cultural heritage protection area?
11. 085
    PlanningAre there specific technical planning management rules or standards?
12. 086
    PlanningIs there an officially approved or publicly announced detailed regulatory plan? Which organization prepared it?
13. 087
    PlanningAre transport connections around the plot adequate?
14. 088
    PlanningAre there requirements for parking provision?
15. 089
    PlanningIs the layout plan coordinated with local and industrial park plans?
16. 090
    PlanningAre surrounding road widening, elevated road or underpass projects planned, and are vehicle access points permitted?
17. 091
    PlanningIs the project coordinated with transport, telecommunications, energy, municipal infrastructure and disaster prevention plans?
18. 092
    PlanningAre living amenities, housing, employee welfare facilities and public services adequately coordinated and provided?
19. 093
    SafetyDo production or supporting activities involve hazardous substances? Do separation distances from surrounding uses meet national requirements?
20. 094
    SafetyAre there any major hazard sources within 10 km of the plot?
21. 095
    Geological hazardsIs the project in an area prone to geological hazards? If so, what mitigation measures are required?
22. 096
    EarthquakesIs the project located in an earthquake fault zone?

Technical and Construction Plans

1. 097
   Technical planHave the production process and its technology source been confirmed?
2. 098
   Technical planAre the technical performance indicators advanced? Compare material consumption, energy consumption, automation levels and other parameters.
3. 099
   Technical planIs the technology compatible with the available raw materials, auxiliary materials and fuels?
4. 100
   Technical planAre the technology and equipment compatible?
5. 101
   Technical planIs the technology appropriate to workforce skills and management capability?
6. 102
   Technical planDoes the technology meet energy conservation and cleaner production requirements?
7. 103
   Technical planIs the process nationally restricted or designated for phase-out? Is it advanced, and what quantitative analysis supports this assessment?
8. 104
   Technical planIs there an alternative technical solution?
9. 105
   Equipment planHave equipment specifications and model selections been finalized?
10. 106
    Equipment planHas the equipment layout been finalized?
11. 107
    Equipment planHave equipment manufacturers been confirmed?
12. 108
    Equipment planIs any equipment nationally restricted or designated for phase-out?
13. 109
    Equipment planIs there an alternative equipment plan?
14. 110
    Equipment planIs the equipment plan among the industry's leading solutions? In what respects?
15. 111
    Equipment planIs the equipment suitable for the technology and products?
16. 112
    Engineering and construction planIs the site area sufficient for the project?
17. 113
    Engineering and construction planIs the proposed location the only feasible site? Is a formal site selection justification required?
18. 114
    Engineering and construction planDo site topography, elevation, slope, rainfall, sunlight and prevailing wind direction meet the project's construction requirements?
19. 115
    Engineering and construction planAre there areas with seriously adverse geological conditions?
20. 116
    Engineering and construction planAre there special land use planning requirements?
21. 117
    Engineering and construction planAre there separate rules for calculating building floor area?
22. 118
    Engineering and construction planAre there specific floor area calculation rules for different floor-to-floor heights?
23. 119
    Engineering and construction planAre there different planning requirements for different property types?
24. 120
    Engineering and construction planAre there building height restrictions?
25. 121
    Engineering and construction planWhat setback and control requirements apply to development boundaries and designated green-space boundaries?
26. 122
    Engineering and construction planAre road widening, elevated road or underpass projects planned?
27. 123
    Engineering and construction planAre vehicle access points permitted?
28. 124
    Engineering and construction planWhen providing civil air defense space, can approval be obtained for an allocation to material storage facilities?
29. 125
    Engineering and construction planAre there rules governing performance-based fire safety design?
30. 126
    Engineering and construction planAre there sunlight access design requirements?
31. 127
    Engineering and construction planAre there mandatory energy conservation or emissions reduction requirements, such as rainwater reuse, reclaimed water, ground-source heat pumps or solar energy?
32. 128
    Engineering and construction planDo soil and geological conditions meet the project's construction requirements?
33. 129
    Engineering and construction planAre there areas with soft-soil foundations?
34. 130
    Engineering and construction planAre special design plans normally required for excavation support and groundwater dewatering? What is local practice?
35. 131
    Engineering and construction planAre there minimum soil cover depth requirements for areas counted as landscaped space?
36. 132
    Engineering and construction planDo local fire authorities have sufficient familiarity with performance-based fire safety design?
37. 133
    Engineering and construction planAre there special fire safety design requirements?
38. 134
    Engineering and construction planAre surrounding firefighting facilities adequate?
39. 135
    Engineering and construction planAre site elevations and flood protection, drainage and sewage handling capacities appropriate? Could waterlogging occur during the rainy season?

Regulatory Compliance Facilities

1. 136
   Are fire protection facilities designed, constructed and commissioned alongside the main works, and are they compatible with the main project?
2. 137
   Are safety facilities designed, constructed and commissioned alongside the main works, and are they compatible with the main project?
3. 138
   Are environmental protection facilities designed, constructed and commissioned alongside the main works, and are they compatible with the main project?
4. 139
   Are occupational disease prevention facilities designed, constructed and commissioned alongside the main works, and are they compatible with the main project?
5. 140
   Are soil and water conservation facilities designed, constructed and commissioned alongside the main works, and are they compatible with the main project?
6. 141
   Is an energy conservation assessment required, and is it consistent with the main project?
7. 142
   Are there special fire safety design requirements, and are they compatible with the main project?

Utilities and Supporting Infrastructure

1. 143
   Water supply. Have the water source and available supply volume been confirmed, and can they meet daily production demand? Is there a connection within the plot boundary? What procedures are required, and what is the water tariff?
2. 144
   Electricity. What are the construction and production power loads? Are the connection and supply facilities complete, and do they meet design capacity and operating requirements? Is a spare outgoing feeder bay available? What connection procedures and electricity tariffs apply?
3. 145
   Road access. Have road transport facilities for incoming raw materials and product movements been secured? Are there restrictions imposed by transport authorities?
4. 146
   Telecommunications. Is telecommunications infrastructure available? How is the connection arranged, and at what cost?
5. 147
   Heat supply. Does the project require an external heat source? How is it connected, and at what cost?
6. 148
   Gas supply. Does the project require gas, and in what quantity? How is it connected, and at what cost?
7. 149
   Wastewater. Will wastewater be discharged off-site? Have treatment facilities been secured? How is the connection arranged, and what discharge charges apply?
8. 150
   Waste gas. Will the project release waste gas, and what pollutant discharge charges apply?
9. 151
   Solid waste residues. Will waste residues be removed or discharged off-site, and what pollution-related charges apply?

Production Inputs and Workforce

1. 152
   Raw and auxiliary materialsHave procurement channels been secured?
2. 153
   Raw and auxiliary materialsMust any raw materials be imported, and have the arrangements been confirmed?
3. 154
   Raw and auxiliary materialsIs continuity of supply assured?
4. 155
   Raw and auxiliary materialsHave price movements been investigated and confirmed?
5. 156
   Workforce organizationHave labor sources and the recruitment plan been confirmed?
6. 157
   Workforce organizationHas a training plan for new employees been established?
7. 158
   Workforce organizationAre recruitment difficulties expected or already being experienced?
8. 159
   Workforce organizationHave production management policies and procedures been established?

Final investment decision review

1. 160
   Web edition additionWho has approved the final investment decision, which material risks remain unresolved, and what evidence, owner, deadline and stop or proceed condition apply to each open item before funds are committed?

Convert the answers into an action register

Separate requested public-sector clarifications from confirmed commitments. Assign each company task to an accountable owner. A register is complete only when the evidence resolves the decision, not merely when every cell contains text.