THE LIFE AND DEATH OF A JOINT VENTURE IN CHINA

• Citation: (1994) 6 SAcLJ 213
• Date: 01 December 1994
• Author: WHANG SHANG YING
• Published date: 01 December 1994

Edited by Duncan Freeman.

[Hong Kong : China Law & Practice. 1993. viii + 230pp. Paperback]

As more Singapore businesses venture overseas, the need has arisen for Singapore lawyers to be aware of legal developments outside their country. No overseas jurisdiction has a more compelling claim than that of China. It is the most popular destination for Singapore investors. The reasons are not difficult to discern. Apart from the ties of history and ethnicity, it is one of the most dynamic economies in the world. Adding to its attraction is the prospect of an enormous market opening up as the Chinese economy becomes more liberalised.

Given the circumstances, the publication of The Life And Death Of A Joint Venture In China is timely and welcome. There are 14 chapters, each of which is written by a different Hong Kong-based practitioner specialising in China investment. One of the contributors is a partner with an international accountant firm; the others are lawyers, either in private practice or working as in-house counsel.

The book follows the life cycle of a fictional Sino-foreign equity joint venture. It commences with pre-contract considerations and negotiations and examines the framework of the joint venture contract. The chapters that follow deal with the operational aspects of a joint venture (the approval and registration process, capital contribution and financing, land and construction, foreign exchange balancing, taxation, accounting, labour and management, technology transfer and intellectual property protection, marketing and operations, environmental protection), before closing with dispute settlement and termination, dissolution and liquidation. Hypothetical situations involving the joint venture and other protagonists are used to illustrate the various legal issues that arise.

This is above all a practical book. The large format, the use of notes in the margin and boxed passages, and the provision of a checklist at the end of every chapter make it a reader-friendly manual for corporate negotiators as well as legal practitioners. On the debit side, the glossary of Chinese terms is rather brief, and no index is provided.

In the opening chapter, Edward Neunuebel of Dow Chemical places China joint ventures in the context of the country’s background of central planning. Given the frenetic economic growth in recent years, it is easy to overlook the fact that, when the first joint venture law was promulgated in 1979, China was a socialist state in which private sector business activity was very much the exception rather than the norm. The lack of settled law concerning such fundamental...