ABSTRACT
This chapter delineates how to select appropriate Chinese partners for foreign companies. It focuses on what partner attributes or selection criteria must be considered in the selection process. The chapter illustrates three categories of criteria: strategic, organizational, and financial. It presents some empirical results about the importance of such criteria obtained from the recent survey conducted in China. During the process of joint ventures formation, foreign parent firms must identify appropriate criteria for local partner selection as well as the relative importance of each criterion. If a foreign company seeks reductions of financial risks and operational uncertainties, more weight may be placed on attributes such as corporate image, organizational leadership, human resource skills, and financial leverage. Viewed from the operational perspective, a less profitable business often implies organizational weaknesses in the technological, operational, and managerial spheres. A superior corporate image usually implies a superior product brand, customer loyalty, or organizational reputation.
