China: A Joint Venture Playground

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China: A Joint Venture Playground

China is an economic superpower. It is home to some of the world’s most industrious manufacturers who are responsible for the production and export of many leading consumer brands familiar to people around the world. Currently, China’s economy is growing at a phenomenal 9% per annum. If ever there was ‘undiscovered territory’ in the world of joint ventures, China would surely qualify!

Joint Ventures in China

China is a playground for joint ventures and strategic alliances. The economic set-up is perfect: China mass produces quality products at very low cost – America and Europe have consumers who’ll pay top-dollar for those products. In the middle are companies who can generate a great deal of revenue from facilitating the export/import and product distribution, effectively connecting the sellers with the buyers.

 

Chinese manufacturers are only too happy to establish joint ventures with companies who have a market for their products. Given that production costs are low, joint venture companies find that they can distribute and sell products from China at a 70% or 80% profit margin, and still undercut the competition in their home country!

So, how do firms in the ‘West’ go about establishing joint venturegreatwall3s with Chinese firms? The answer is to register an interest with companies who specialize in matching joint venture applicants together. These firms include the likes of JV Base (http://www.jvbase.com) in the UK.

Manufacturers, master distributors and agents in China can be found via these ‘matching’ companies. It makes the process of establishing a joint venture relationship very easy indeed.

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