UK Joint Ventures in China: Motivation and Partner Selection

Abstract

The Chinese government has liberalized the foreign investment environment considerably in order to encourage inward investment, primarily through joint ventures. Reviews the changes in the regulatory environment and presents new data from UK partners engaged in Chinese joint ventures. The findings indicate that the main force motivating UK firms to form joint ventures is to gain faster entry to the Chinese market. The joint ventures allow UK firms access to largely intangible inputs that they would otherwise have difficulty acquiring. While choice of Chinese partners appears to be highly constrained, on the whole the UK partners analysed the joint venture decision thoroughly and generally concluded that they had joined forces with the “right” partner.