China Briefing has published an article entitled…
China Joint Ventures As Strategic Investment
Here’s an extract – link to the full piece at?? http://www.china-briefing.com/news/2009/10/27/china-joint-ventures-as-a-strategic-investment.html
Part One: Why the Need for a Chinese Partner?
Oct. 27 ? As the United States shows signs of emerging from recession, there has been some discussion on the best way to enter the China market but perhaps under reduced financial constraints. A joint venture partner is often considered because it is less expensive than building from scratch.
In fact, this debate has been doing the rounds ever since China became a major beneficiary of foreign direct investment. Another school of thought dictates that under no circumstances should a joint venture in China be considered: Chinese laws are said to favor the Chinese partner; there are issues of corruption and the Chinese side is difficult to manage in terms of adherence to international standards of accounting and transparency.
While there is a measure of truth in all arguments both pro and con as regards JV?s, a sensible application of due diligence and an understanding of what a Chinese partner can bring to a JV are paramount. In this series of articles we examine these issues, developed from over seventeen years experience of our firm establishing joint ventures in China.
