19 Pages

Sharing Knowledge and Decision Power in Sino-Foreign Joint Ventures

Because of the growing openness of the Chinese economy, an increasing number of foreign companies is operating in mainland China. The country has become the largest recipient for Foreign Direct Investment (FDI) amongst the emerging countries. The size and the dynamic of the Chinese market are so impressive that foreign companies are convinced that they cannot afford to be absent. The entry of the People’s Republic of China (PRC) into the World Trade Organization (WTO) in 2001 will probably act as a new stimulus to this trend. Sino-foreign joint ventures are still the dominant pattern for entry into the market-even if, according to Vanhonacker (1997), an increasing number of foreign companies operate as Wholly Foreign Owned Enterprises (WFOE).