China's Joint Venture Law is an impressive step towards modernizing the Chinese economy with the help of Western managerial and technical help. It is, however, unclear and incomplete in several respects. In assessing the nature of the Joint Venture Law as it presently stands and in forecasting the changes that will be made, it is helpful to look both to the experiences of Romania and Yugoslavia as well as to China's own experience with compensation trade and joint state-private enterprises. Not only are these prior experiences valuable from an analytical point of view, but they are also useful as practical tools available to prospective joint venture participants in their negotiations with the Chinese joint venture party or the Chinese authorities. Prospective joint participants can use these precedents to argue for greater benefits and greater clarity in the joint venture contract and legislation. There is no reason why prospective joint venture parties should passively await the promulgation of regulations or new legislation by the Chinese authorities without expressing their own views in an effort to influence the nature of these regulations or legislation. It seems clear that suggestions couched in terms of the Chinese experience familiar to the Chinese authorities will be most effective. The prior Chinese experience with compensation trade and joint state-private enterprises, as well as the experience of Romania and Yugoslavia with joint ventures, therefore constitute a valuable reference source which prospective joint venture parties should exploit to the maximum.
Preston M. Torbert,
China's Joint Venture Law: A Preliminary Analysis,
12 Vanderbilt Law Review
Available at: https://scholarship.law.vanderbilt.edu/vjtl/vol12/iss4/1