The U.S. corporation Fun Toys, Inc. sets up a firm in China. The parent company remains in the United States and retains complete ownership of the China branch as well as complete authority and control over all phases of the operation. This is

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In a wholly owned subsidiary, the parent company has complete ownership and control over the branch in another country. This option matches the scenario given in the question, where Fun Toys, Inc. sets up a firm in China but retains complete ownership and authority over it. The other options do not fit the given scenario. A franchise involves granting another party the right to use the parent company's brand name and business model in exchange for fees and royalties. A joint venture involves two or more companies collaborating and sharing ownership and control of a new entity. Direct exporting involves selling goods or services directly to customers in another country, without establishing a physical presence in that country.

The US Corporation Fun Toys, Inc