Cultural Problems within International Joint Ventures in China

Inhaltsangabe:Abstract: Since the reforms of 1979 the People`s Republic of China`s (PRC) economy has experienced significant growth. There is no doubt that this economic expansion has been a direct result of the opening up of Chinese companies to foreign investors. The number of sino-foreign joint-ventures which are by the way a privileged form of investment granted by the Chinese government has been increasing rapidly. According to Chinese statistics at the end of 1998 Chinese-foreign joint-ventures represented approximately two thirds of about 300 000 foreign investment projects that were approved by Chinese authorities. In fact among the developing countries China is currently the one which attracts the most western investments. Joining the World Trade Organization (WTO) in 2001 China pushed this development even further and while other countries were fighting a recession at the same time it was able to sustain a growth of 7.8% regarding the Gross Domestic Product (GDP) 14.1% with respect to exports and 10.4% regarding imports. Consequently there is steady interest of foreign companies to form joint-ventures in the People's Republic of China. But whereas in the 1980ies mostly the huge corporations where entering this market nowadays more and more midsized companies for instance from Germany are forming joint-ventures too. From the region „Mittelfranken” for example 320 businesses have developed ties with the People’s Republic – a plus of 60% from 1996. Many foreign firms are considering entering joint-ventures in China because this seems to offer the most attractive method for gaining access to the huge potential of the labour pool and market of China. Nonetheless there are many warnings about the problems that have to be faced in order to establish a joint-venture in China. Chief among these is the problem of differing management styles between Foreign and Chinese partners. Very little accurate information is available about Sino-Foreign joint-v