Joint Venturing in China

Abstract:

Equity joint ventures (JVs) are the mode of choice for about a third of all foreign investments around the world. Nowhere have they been used more frequently in recent years than in China. Over the past 30 years, China’s attitude toward JVs as a form of investment has evolved. Originally, not only were joint ventures the only form of foreign investment allowed, but those JVs which were signed had to contain a sunset clause whereby full ownership would ultimately revert to the Chinese partner. This latter clause was eventually dropped, and later, the requirement that investments had to be jointly owned. In 2009, in most sectors, investors in China are free to use joint ventures or wholly owned subsidiaries, whichever they prefer.