Is China a Joint Venture Playground?

Filed in archive Entrepreneurship on December 2, 2007

I found an anonymous blogger recently who reckons that China is a joint venture playground. Do you agree with him?

I think we're all waiting to see right now whether China's new labor law will turn the country into a joint venture mine field.




This is part of what our blogger said:

China is a playground for joint ventures and strategic alliances. The economic set-up is perfect: China mass produces quality products at very low cost - America and Europe have consumers who'll pay top-dollar for those products. In the middle are companies who can generate a great deal of revenue from facilitating the export/import and product distribution, effectively connecting the sellers with the buyers.

While he is right in his analysis, there are a couple of issues left out of the equation...

I've already mentioned China's new labor law. Twenty-nine days until many of the rules for employment change. We'll see how that effects joint ventures as China's courts and government agencies begin to interpret the new law.

There's also the changes made recently to the Catalog for the Guidance of Foreign Invested Enterprises. China Law Blog covered those changes well, and one of the changes is that China wants to put an end to the model this blogger describes - at least in its pure form. Foreign investment in China in companies that only manufacture items for export is being discouraged (Chinese for "ended," I think). So now when you invest in a joint venture you'll have to somehow become involved in local markets, as well as exporting goods out of China, if I understand the intention of the new rules correctly.

How do you get involved in a joint venture with a Chinese company? Our blogger friend suggests contacting a match-maker firm, like JV Base...