企源知识库

Passage 1¹Foreign manufacturing business in China falls into one of the three categories: foreign equity joint ventures, foreign cooperative joint ventures, and solely owned foreign investment enterprises. To these foreign investments are added direct investment in bonds or shares. Selling is done through a joint venture partner whose business license allows sales within China. Sourcing in China involves a contract agreement with a Chinese partner in order to guarantee quality control and product availability.²Direct investment in China may be supplying equity for joint venture projects, buying stocks in a joint stock limited company, and buying bonds that are floated for large infrastructure projects, for example. The rate of return on bond investment can be between 15 percent and 17 percent for a 15-year period; however, the investment is not returned.³The first step in entering China for business is to identify one's own company's needs. China is not the right environment for every kind of foreign business. Foreign companies also need to identify goals:(1) to sell to China;(2) to buy from China;(3) to manufacture in China for export only;(4) to manufacture for domestic markets.⁴The next step, if the goal is buying, selling, or forming a joint venture, is to identify a partner. The choice of a partner is extremely important and can be accomplished in several ways. Chinese consulates and embassies can offer information about potential partners. Consulting firms in China and abroad can also identify potential partners. Chinese government commissions that approve foreign investment, such as the Shanghai Foreign Investment Commission, can provide lists of partners. Delegates from China may travel to a foreign firm's head office and initiate talks about partnership.⁵The third step is to find out about these potential partners, usually by having one's own representatives meet with the Chinese in China. Good research is important. Key factors are the Chinese company's experience with foreign joint ventures and capability in the business. Foreign firms do not usually have more than one partner for each project.⁶The fourth step involves three major documents. The first is a Letter of Intent that establishes the agreement reached between partners to work together to accomplish the goals of both sides in this partnership. This is recommended for the linkage between foreign buyers from China with an import-export agent that will oversee the buying, as well as for joint venture partners for marketing and manufacturing. When the partners plan a joint venture company they will next have Articles of Association or a Charter drawn up, detailing how the new company entity will be structured. This leads to a joint venture contract. It may have appendices that specify other specific contract agreements, such as intellectual property rights, patent rights, and export numbers. The documentation is often prepared for foreign companies by foreign law firms operating in China.⁷The fifth step in a joint venture is a feasibility study. This document, approximately 20 pages long, follows a specific format and is really a joint justification study, signed by both partners. The feasibility study must be performed by a Chinese-approved organization, usually a consulting firm in China. In some cases, an environmental impact study is part of this step.⁸The final step is  approval  resulting  in  the  business  license.  Businesses  must  operate strictly within the scope specified in the business license. It is renewed every year.⁹Within each industry there are specific requirements for the business license as well. Of course, once authority is given for the joint venture to exist, the company has to implement the approvals. This usually results in further negotiations between partners.¹⁰Chinese law. China's legal system is slowly beginning to develop, but it is still in the early stages. The new Company Law, effective July 1, 1994, is the first of its kind since the establishment of the People's Republic of China in 1949. Previously, foreign investors had to rely on vague rules cited by officials and on hearsay from other foreign firms' experiences ,  now they can base their decisions on this law, adopted at the Fifth Session of the Standing Committee of the  8th National People's  Congress. The  Company  Law governs  all limited liability and joint stock companies, including those with foreign investment.¹¹Accounting. Accounting practices are not universal in China; the kind of organization -  equity joint venture,  cooperative  joint  venture  or  solely  owned  foreign  investment  enterprise — will determine how accounts are kept. Foreign-investment manufacturing firms  are  not  subject  to  import  duty  if their  products  are  exported.  Duty-free  havens  exist  to encourage manufacture-for-export by foreign-investment enterprises.¹²Marketing. Marketing inside China is very difficult for foreign firms unless they are joint venture partners of Chinese firms already involved in domestic marketing. Distribution   channels usually coincide with the governmental administrative regions. Transportation and   telecommunication  infrastructures  limit  development  also.  Nevertheless,  the  market  is  so  enormous  that  even  one  region  is  enough  to  sustain  a  business.  Consumer  demand  for  commodities and services is great. Manufacturers can sell with very little promotion, but at   the  same  time  name  recognition  is  very  important  for  the  appeal  to  status  that  is  a  characteristic  of Chinese  culture.  Billboard   advertising  is  effective,  along with television commercials.¹³Financing.  Financing  of  foreign  business  in  China  may  take  several  forms.  Wholly foreign   investment  enterprises  usually  export  to  a  subsidiary  or  trading  company  in  another country.  The  total  investment  in joint  ventures  is  registered  capital  (equity)  plus  circulating  funds (debt). Debt-equity ratios are published and conform to levels set by China. The equity often comes from the foreign partner and working capital from the Bank of China  .In   large projects,   companies  can  go public.  Some   enterprises   in  China  float bonds;  in  1993 convertible bonds appeared, convertible into common shares. One successful example is the Shanghai Pinkerton Float Glass Plant.¹⁴"Equity   joint  venture  operations  allow  either  partner  to  bring  anything  into  China without duty. Labor is not equity; when the contract is being negotiated, each side inflates its contribution. In a cooperative joint venture, only things used specifically for production are  duty free. 

Which of the following is most likely to be a partner of a foreign company
A、A company closely related to Chinese consulates and embassies
B、A company with good research
C、A company with its own representatives
D、A company with both experience with foreign joint ventures and ability in the business
【正确答案】：D
【名师解析】:选项D是正确答案。根据Passage 1的第5段，当外国公司考虑进入中国市场时，选择合作伙伴至关重要。这段提到，了解潜在合作伙伴的关键在于其与外国合资企业的经验以及在业务领域的能力。因此，一个具有与外国合资企业经验并且具备业务能力的公司，最有可能成为外国公司的合作伙伴。选项A、B和C虽然可能与合作伙伴选择有关，但并没有直接指出这些因素是选择合作伙伴时的关键考虑因素。选项D则明确指出了这两个关键因素，因此是最佳答案。