Essay on The Advantage of Joint Ventures in China
October 5, 2011
The paper analyzes the advantages of Joint Ventures in China. The opening up of China’s economy to trade and foreign direct investment has been an important component in the growth of China, particularly in industry. Joint ventures in China produce advantages for the partners. China is the world’s largest and most rapidly growing developing country, it is very important to learn the advantages of Joint ventures in China. I will discuss two types of Joint Ventures and how to establish Joint Ventures (JV). Joint ventures include Equity Joint Ventures (EJV) and Contractual Joint Ventures (CJV). Then, I will introduce why foreign investors should invest in China. …show more content…
The advantages of Joint ventures in China
Since the policy reform process began in 1979, China’s economy has experienced rapid growth. The record on growth in China is remarkable. No one can dispute that China has been successful. According to Ambler, Tim, Witzel and Morgen said China has the world’s largest population. It is the third largest nation in terms of land. When China joined the Word Trade Organization, it became a major power in that organization. China entered the World Trade Organization in 2001,which effectively accelerate the development of economy in China. Therefore, Joint ventures have contributed to growth and industrialization.
Two types of joint ventures “A joint ventures is a business arrangement in which the participants create a new business entity, contractual relationship, share investment, operation expenses, management responsibilities, and profits and losses.” (JyS's, 2009)
According to Ming Zeng and Peter J. Williamson said China has more experience than other countries. The Chinese government encourages foreign investors to establish JVs in order to get advanced technology and management skills. On the other hand, foreign investors can enjoy low labor costs, high labor