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Identifying key factors for successful joint venture in China

Jiaqin Yang, Department of Management, Georgia College and State University, Milledgeville, Georgia, USA
Huei Lee, Department of Finance and Computer Information Systems, Eastern Michigan University, Ypsilanti, Michigan, USA
Abstract
China has become one of the top three nations for attracting foreign investment in the international market since 1990. Hundreds of international corporations are currently competing for business opportunities in China in the form of joint venture or direct investment. Both successful joint ventures and failed investments have been reported. Research, addressing issues of the conflicts between different cultures, traditions, as well as value systems, has appeared recently, but few focuses on identifying the key factors and their managerial implications for foreign investors to successfully enter China’s market. This paper presents an application of analytic hierarchy process (AHP) in such an effort, through a case study of China Motorola. This study shows that for foreign investors, by identifying key success factors and then incorporating those factors into firm’s long-term business strategies and policies can enhance their business opportunities in China for a long time to come, even under China’s current complex economic and marketing conditions.
Article Type:
Case study
Keyword(s):
International trade; Joint ventures; China; Analytic hierarchy process.
Journal:
Industrial Management & Data Systems
Volume:
102
Number:
2
Year:
2002
pp:
98-109
Copyright ©
MCB UP Ltd
ISSN:
0263-5577
Introduction
With the fastest growth rate in last two decades, China has become one of the largest markets for international business. Hundreds of international companies have been competing for business opportunities in China in the form of joint venture or direct investment – since the Chinese Government opened its market in the 1980s. As its economic reform continues, China’s perennial economy expansion scale and huge market potential have been continuously attracting the attention of international business giants (Ma, 1997). By the end of June 1997, it was reported that over 200,000 business joint ventures had been registered in China, with a total foreign investment of $204 billion ($15.7 billion from US companies) (China National Statistics Bureau, 1997). The International Monetary Fund (1997) predict that if China can sustain its current growth rate, its GDP will reach the total GDP of the European Union and the USA in ten years. The World Bank (1997) indicate that among the world’s five largest developing countries – China, Russia, India, Brazil, and Indonesia, China has the most potential for growth and becoming one of largest markets for international business.
The adjustment of government policy also played a role in the recent increase of foreign investment in China. For example, in order to provide foreign investors more freedom in currency exchange, two government guidelines were published in 1996 regarding open foreign investment – Introductory Industrial List for Foreign Investment and Current Regulations Against Foreign Investment in China. As a result, after July 1997, foreign investors were allowed to make their bank transactions based on an international currency or free exchange from China’s $RMB to international currencies. More importantly, a new gove本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。