Encyclopedia of Finance and Economics: Sino-foreign joint ventures to make products, the risk is not low

category:Finance
 Encyclopedia of Finance and Economics: Sino-foreign joint ventures to make products, the risk is not low


It seems to be a strong alliance, but only a year later, there are rumors that the cooperation between BMW and Great Wall Motor in the joint production of electric MINI models in China may be in danger of failure.

So is Sino-foreign joint venture cooperation really as superficial as the United States?

Sino-foreign joint ventures are independent in legal status, but they do not exist as a single economic entity, and their operation and management are restricted by the parent company.

If the contribution ratio of the parent company is not 50% each, they will strive for the controlling right of the joint venture and master the main control right respectively, which will have a significant impact on the leading products, markets and management. Therefore, there may be competition behind the seemingly cooperative Sino-foreign joint ventures. Years ago, Wahaha and Danone jointly established a joint venture company. Finally, Danone filed more than 20 lawsuits against Wahaha both at home and abroad because of the equity competition. In the end, Danone won no lawsuit and withdrew from Wahaha. Sino-foreign joint venture is a win-win way of cooperation, but if the partners do not implement the correct way of cooperation, they will not reap the benefits. Source: Netease Financial Responsibility Editor: Zhong Qiming_NF5619

If the contribution ratio of the parent company is not 50% each, they will strive for the controlling right of the joint venture and master the main control right respectively, which will have a significant impact on the leading products, markets and management.

Therefore, there may be competition behind the seemingly cooperative Sino-foreign joint ventures.

Years ago, Wahaha and Danone jointly established a joint venture company. Finally, Danone filed more than 20 lawsuits against Wahaha both at home and abroad because of the equity competition.

In the end, Danone won no lawsuit and withdrew from Wahaha. Sino-foreign joint venture is a win-win way of cooperation, but if the partners do not implement the correct way of cooperation, they will not reap the benefits.