Selected Case Studies
The following case studies illustrate three different types of operations within China. The first case focuses on the Beijing Tokyo Photographic Art Company Ltd., a Chinese-Japanese joint venture, and the problems. it faced concerning local labor relations, foreign exchange deficits, and negotiations. The second case also highlights a Chinese-Japanese venture, the Beijing New Century Hotel Company Ltd., and examines the unexpected problems encountered by the foreign partner due to inflationary and other macroeconomic conditions within China. Finally, the third case examines a Sino-American venture, the Babcock & Wilcox Beijing Company Ltd., and offers insight into the Chinese bureaucratic involvement in business, especially the role of the Chinese government in negotiations. All three cases portray difficulties involving labor relations, government regulations, joint venture negotiations, and unanticipated costs that are typical issues faced by foreign joint venture firms in China.
In reviewing these cases, one must recognize that no set of cases can fully illustrate all the problems and successes of foreign investment operations in China. Moreover, one must be cognizant of the time frame in which the joint ventures were initiated and recognize that each case portrays the initial experience of a foreign company in establishing a joint venture operation in China. After eleven years of the open-door policy, firms embarking on new ventures in China during the 1990s are able to benefit from the experiences of their predecessors.