Dealing with Government in Joint Ventures

April 2004 China Briefing

In this issue we examine assessing risk when doing business with the Chinese Government. Conducting risk assessments, planning your due diligence and the issues concerning entering into joint ventures with state owned enterprises are all discussed. The issue covers meetings Chris Devonshire-Ellis, Senior Partner, Dezan Shira & Associates had with Bo Xi Lai, Minister for Commerce, as well as his piece “Dealings With the China Government” in which definitions of what is actually a government operation and is state owned, and what is a shell company set up by government officials, and the liability issues affecting these explained in detail. A secondary article “Business Dealings with Government Partners Presents Special Risks That Require Extra Care” by Peter Humphrey, details recent China government corruption and fraud cases, and examines how to conduct investigative due diligence, examines FCPA risks when dealing with the Chinese government, and identifies contractual precautions. Regional Updates are also provided, including “New Regulations on Expatriate Individual Income Tax Filings” by Alice Wei, Dezan Shira & Associates Beijing office, a report on the Bank of America opening its first consumer banking division in Shanghai by Lulu Zhang, Regional Partner, Dezan Shira & Associates Shanghai, a piece on the Western regions restoration of the Yellow River, and an article by Alberto Vettoretti, Regional Partner, Dezan Shira & Associates South China “Improved Banking Procedures for Foreign Invested Enterprises in Shenzhen”.