What can potential foreign investors learn from this dispute? Although JVs in China can be quite difficult, with proper planning and management, they can be successful. In the case of the Wahaha-Danone JV, many basic rules of JV operations in China were violated, virtually guaranteeing the JV’s destruction. According to Steve Dickinson, lawyer at Harris Moure PLC, the primary rules violated are as follows:
1. Don’t use technical legal techniques to assert or gain control in a JV.
2. Do not expect that a 51 percent ownership interest in a JV will necessarily provide effective control.
3. Do not proceed with a JV formed on a weak or uncertain legal basis.
4. The foreign party must actively supervise or participate in the day-to-day management of the JV.
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