Joint ventures continue to be a primary vehicle for U.S. corporations expanding their businesses in China. The country, however, remains a risky one in which to operate. Among the chief concerns for foreign investors are a lack of infrastructure, evolving rules governing foreign investment and weak enforcement of intellectual property protections. (Ford Motor Co.'s [NYSE:F]
possible sale of its Volvo division to Zheijang Geely Holding Group Co. Ltd. is an example of that latter.)
Of course, the challenges aren't enough to keep corporations out of China. The potential rewards are too great. The issue then is mitigating risk, and a thorough vetting of a Chinese partner can help accomplish that.
This article at China-briefing.com is a decent guide.
A point worth highlighting is that when a Chinese business becomes partially owned by a foreign investor, it can attract more attention from Chinese regulators:
That makes it even more important to dive deep into a Chinese partner's past and present business, its suppliers and management. The article highlights critical areas to be vetted, including existing licensing agreements, corporate structure, land use rights, valuations of equipment and buildings, and, of course, IP. - Suzanne Stevens
Join Corporate Dealmaker's LinkedIn forum
Juergen Lasowski
And the winners are...
Volva?