The recent events in China's Tiananmen Square sent a deep shudder through the boardrooms of many firms in the United States, Western Europe, and Japan. While most foreign companies doing business in the People's Republic of China (PRC) have felt somewhat uneasy about making significant commitments of resources to China, their confidence had been increasing with each passing year of China's "open door" policy. This confidence had been reinforced by efforts at all levels of the Chinese leadership to improve the investment climate. Much of this growing confidence, however, was shattered by the actions of the Chinese leadership on June 4, 1989. Today the future of foreign investment in China is uncertain, as many foreign companies once active in China adopt a wait-and-see attitude.