China -- Damn The Joint Venture
China Business Services Blog just did a short post on joint ventures (JV), entitled, "Don't Quote Me (on Joint Ventures)." Regular readers know I am generally not a fan of joint ventures. Yes, they are sometimes necessary, but when they are not, they are to be avoided. What you can get out of a joint venture you can almost always get out of a contract as well, without the oftentimes devastating entanglements. For more on this, check out To Succeed In China Know The Now, The Asianist Knows China, When In China, Don't Get Screwed -- The Movie, and the one that started it all, WFOE v. JV.
The China Business Blog's post consisted entirely of the following quote from Alan Brown, Unilever's head guy in China, responding to a question whether to have a joint venture in China:
'If you are working in a highly regulated industry, then JV partners are almost essential'If you are working in a highly deregulated industry, they can be a damn nuisance'.
Well put. But, for those still considering a joint venture, this CEIBS (China Europe International Business School) article, "To JV, or Not to JV - How MNCs Choose Local Partners?" makes a nice starting point for the various strategies one might use in picking the right one.
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