The China Venture

Only a so called "ad-hoc guanxi“ or the relationship thr ough informal associations could be a
realistic aim for a foreign investor in order to build up an obligation relationship with Chinese
partners. 92
It is a prejudice in the Western world that Chinese entrepreneurs are regarded as "patriarchal
autocrats" who alone reign over huge and hierarchically structured companies. A
decentralised leadership culture is much more common relying on delegation of responsibility
and trustful connections. This is mostly due to the control of the family network still present
today and widely used by the middle class as a reliably working credit system. 93 In China,
with her close knit of family ties, borrowing from family members is very common. Other
sources of financing are "tontines" or "huay", an informal system of banking commonly found
among Chinese. 94
3.2.4.7 Environmental Protection
According to the relevant Chinese laws and regulations, projects with foreign investments that
affect the environment must be in compliance with China’s regulations regarding
environmental protection of investment projects, following examination and approval
procedures, to avoid damage to China’s environment arising from random construction.
According to the Decision of the State Council on the Focal Points of the Present Industrial
Policies, China does the following:
• exercises strict control over imported raw materials, products, technologies, and equipment
that result in serious environmental pollution that is hard to treat, in order to prevent
foreign polluting sources from entering China
• forbids the introduction of projects that degrade natural resources or human health or
seriously pollute the environment with no effective counteractive measures or emit
pollutants that exceed State standards
• restricts the introduction of projects that may result in serious hard to treat environmental
pollution, such as dismantling and reconditioning of old vehicles or retreating of old tires
92 Students' report on excursion to Shanghai, FIM at Hochschule St. Gallen, 1997.
93 Source: "The Chinese Connection" from Swiss periodical "Bilanz", issue 6/1997, p. 94.
94 Sources of business financing and financing practices, Chong Li Choy, 1990.
72