ABSTRACT
American Motors was rewarded for singing China's praises, keeping its complaints quiet, and saying nothing about the details of the May agreement. Beatrice's main problem in China was the same one that plagued the other joint ventures: the difficulty of obtaining foreign exchange. The deal that Dutt, Beatrice's chairman, had approved required Guangmei to earn foreign exchange through exports. The American Motors dispute had served as both symbol and catalyst for a change in the relationship between China and the Western companies. Along with the propaganda campaign, China made genuine efforts to change some of its rules covering Western businesses. The Chinese regime knew the importance of a good publicity stunt. On October 11, 1986, the Chinese government issued a series of new provisions designed to improve the business climate. In addition the government promised greater autonomy in recruiting, hiring, or firing Chinese workers.
