The China Venture
The China Venture
The China Venture
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Available Distribution<br />
Channels<br />
Market Knowledge<br />
Relationship (Guan Xi)<br />
Financial Power & Capital<br />
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2<br />
1<br />
0<br />
Quality of<br />
Infrastructure<br />
FIGURE 3-8: Profile of a Chinese Joint <strong>Venture</strong> partner<br />
Banks and Government Institutions<br />
Available Management<br />
Resources<br />
Suitability of Product &<br />
Services Portfolio<br />
Production Know-how<br />
Foreign banks may act as lenders of capital for SME’s and their Chinese joint venture<br />
partners. However, the present practice of European banks is not to take fairly high risks with<br />
such an engagement in return of a comparatively low margin. <strong>The</strong>refore, it is disappointingly<br />
difficult to raise capital through banks for this kind of projects. Alternatively, foreign<br />
governments run programs to support SME’s with venture capital to a certain extent.<br />
Once established in <strong>China</strong>, SME’s may use the banks’ connections to the industry to gain<br />
access to certain markets. Also Government institutions like the "Delegation of German<br />
Industry and Commerce“ or the Swiss Embassy based Beijing and Shanghai support SME’s<br />
with know-how and makes contact to various potential partners for joint ventures. <strong>The</strong>y also<br />
assist with legal advice during the set-up phase of the new company.<br />
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