May 2011
Technology, managerial expertise, and access to global markets now attract Chinese companies that were once looking for only capital. Foreign investors' objectives have also changed; they are now expanding in China for the China market instead of just manufacturing in China for the export markets.
In this new environment, old approaches -- e.g., pursuing outright acquisitions or structuring traditional joint ventures -- may not deliver the desired outcome. Western companies must become more open to alternatives such as collaborative structures and flexible contractual relationships with Chinese partners. As Chinese companies become more influential in the global deals market, such approaches will pay off in China and beyond.