The China Venture

ones who atte nded a course. They simply do not have a basic understanding for the different
thinking and values of the Chinese. They expect the Chinese to act like Europeans.
Joint Venture Partner
To be successful in the long run, it is essential to have the right Joint Venture partner, that is
one who is interested in a long-lasting relationship. Therefore it is not unusual for the search
for the right counterpart to take two to three years. It is easy for Chinese to impress Europeans
and to pull the wool over their eyes, because it is quite difficult for investors to check the
information a potential partner gives to them. For this reason it is important to screen each
potential partner carefully.
As a result of early export activities, most of our interviewed companies had already good
relations with China long before their Joint Venture engagement. The advantage of export
partners becoming Joint Venture partners, is that they know and trust each other before they
start their business activities in the Joint Venture.
If no relations to a Chinese company exist, you might get help from the local embassy,
business associations, consulates or of other European companies already doing business in
China. In this case it is best to choose a well established Chinese company as Joint Venture
partner. The company has already successfully built up a reputation in the market and is not
willing to lose this. Therefore, it is likely to act within a Western legal frame. Moreover, the
more similar the business philosophies of the two partners, the bigger the chance of becoming
successful Joint Venture partners in business.
Negotiation process
The negotiation process will last on the average between one and two years. This period was
mentioned by all our interview partners. It is important, that trust in the Chinese partner is a
central point for negotiations. The Chinese partner should, as already mentioned above, be
interested in a long-lasting relationship. This means, that his main target is not to make short-
term profits or misuse the Joint Venture to get access to foreign technology for his own use.
Europeans must take their counterpart serious and must have a fair attitude in order to achieve
a good and friendly negotiation climate. This means, that they have to listen and pay attention
to what their Chinese negotiation partner says. Europeans should try to find a basic
understanding of Chinese values and behaviours. They should stick to their own position and
strategy, but at the same time think also about the Chinese position. One should always
evaluate the Chinese point of view. Good relations at a personal level can help a lot.
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