Concerning the management structure, EJVs generally adopt the general manager responsibility mechanism under the guidance of board of directors. CJVs normally adopt one of the following three managing methods: (1) The general manager responsibility mechanism under the guidance of board of directors, applicable to companies with limited liabilities and legal entity qualification. (2) Joint management, applicable to cooperatives without legal entities established. (3)Entrusted management, applicable to legal entity or non legal entity cooperatives. There are two ways of entrusted management. One is full authority entrust by the cooperative for one party’s management, another is full authority entrust by the cooperative for a third party’s management. The management modes of WOFEs and joint ventures are similar. The author mainly discusses management problems of Equity Joint Ventures in this article, but these problems also exist in enterprises of the other two types in certain degree.
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References
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Multinationals mainly realize matching or unifying of material control right and monopolized proceeds right through the strategy of ‘conspired losses’. The concrete operation route is:(1)transfer profits and assets of joint ventures with all kinds of methods, causing loss and asset outflow of joint ventures; (2)increase capital input and enlarge share holding proportion till share control or even wholly foreign owned using the chance of Chinese parties’ inability to make up losses. Main methods of turning joint ventures into loss by multinationals are: (2)raise price of using key resources including technology and transfer profits to wholly owned subsidies within Chinese territory; (2)transfer profits to subsidies abroad with ‘high purchase price and low selling price, and two endings abroad’; (3)implement market expansion strategy and increase market input; (4)increase numbers of joint ventures and divide sales districts. See Lu Changcong, Zhen Wenquan, Li Zhongguang (2004), the Property Right Variation and Proceeds Dispute in Sino-foreign Joint Ventures, the China Industry Economy, Issue 11.
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Cases quoted in this article and the five principles of dong Feng Nissan Basic Rules is from the From Joint Venture to Harmony by Yang Yunlong and Fu Qiang (2005), published in the Science and Technology Brainpower, issue 8.
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(2007). Corporate Governance Troubles in Sino-foreign Joint Ventures. In: The Legal Environment and Risks for Foreign Investment in China. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-540-48377-9_6
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