Joint Venture

•  Sample dialogue 1

M:Most of the directors thought that China is a big country with a largepopulation, rich resources and a comparatively low level of wage and salary.Whaf is more, the Chinese government offers favorablepolicies to foreign investors. So they have decided to make the investment.

W:I'm happy to hear that.

M: Let's come to some details.

W:We are prepared to contribute 55% of the capital stock. This consists of cash,factory buildings and premises.

M: Well, we will invest by machinery, equipmentas well as our technology.

W: And I expect the registered capital to be 15million US dollars.

M:That is not a small figure. But how can we arrive at theprecise value of the factory buildings and premises?

W: Well ascertain such matters through jointassessment.

M: Are you optimistic about its future?

W: I have every reason to believe that the future isvery promising.

• Sample dialogue 2

W: Now let's come to the next question. In what formwill the two sides make their investment?

M: Well contribute a site and the required plantbuilding.

W: You mean your side will make investment in the formof a site and the plant building on it?

M: Yes, as well as all the necessary water,electricity and gas facilities.

W: How will the evaluation of these things be carriedout?

M: In my opinion, they can be determined precisely onthe basis of the costs.

W: All right.

M: Will you please tell me your form of investment?

   W: Well, it'svery simple. Well contribute a complete production line and relative technologywith all the necessary documentation.

    M: It's farfrom being simple. The machinery and equipment must be entirely new, up todate, and streamlined. The technology must be the most advanced in the world.

W:I believe they will be what you have described.

• Sample dialogue 3

M: I want to know more about the joint venture policyof your country. Could you explain it to me?

    W: Yes, ofcourse. I think you are more concerned about paying less taxes and getting morebenefits, right?

M: Yeah! That is the way I seeit.

W: Well,according to China's investment policy, investors are provided withpreferential treatment, that is, they are allowed a certain reduction or eventotal exemption from income tax in the first five profit-making years.

M: I see. Can we remit our profits to foreigncountries?

W:Yes, you can, after having paid taxes. In some of our EDZthe 10% income tax on the remittance amount that is tobe legally charged can even be exempted.

M: Great! But are investors lawfully protected?

W: Yes, all legitimate rights and interests of foreigninvestors are protected by Chinese law.

M: Thank you. Next, a joint venture shoulddetermine by themselves their organizational structure and personnel system,right?

W: You said it. But the point is that the president is to be appointedby our side and the vice president by your side. All other managing directorsand managers would be nominated and agreed upon by both parties throughconsultations. And the joint venture is to be under the guidance of the boardof directors.

Sample dialogue 4

  M: According to ourpre-feasibility study, we are looking at a large-scale joint venturesupermarket, right?

W: Yes, Mr. Clark.

   M: What about theinvestment proportion of the two parties? Is it set by law that 51% should go to the Chinese party and 49% theforeign party?

W: That used to be the case. Now we have made itmore flexible. If you like, you can have 70% or 80%.

M: Is there a lower limit for the foreign party?

W: Yes, generally not less than 25%.

   M: Well, I believe thatprosperity and stability have come to stay. So we are prepared to contribute50%. W: Good. Well provide the other half.

NOTES 

EDZ (Economic Development Zone) 经济开发区

favorable policy优惠政策

gas facilities煤气设施

 income  tax所得税 

 investment policy 投资政策

large-scale joint venture supermarket 大型合资超市

pre-feasibility study 初步可行性研究

preferential treatment优患待遇

 registered capital注册资金

New words

Ascertain  /asesStein/  v. 弄清楚；确定

contribute  /ken'tnbjuit/ v.出资

 director  /di'rekto/ n. 董事

documentation  /dokjumen'teij^n/ n.文件

 exemption  /ig'zempjsn/ n.免除

flexible  /fleksibl/ a. 灵活的

investor  /in vesta/ n.投资者

legitimate  /li'djitimit/ a.合法的

Nominate /nommeit/ v. 提名；推荐

profit-making  /"profit 'meikig/ a.赢利的

 promising   / promisirj/ a. 有希望的；有前途的

prosperity  /pro'spenti/ n. 繁荣

resource  /n so:s/ n.资源

 stability /sto'biliti/ n. 稳定

Streamlined /stri:mlaind/ a. 现代化的

supermarket  /su:pGma:kit/ n.超市

USEFUL  PATTERNS

• They enjoy full protection of their legitimateright and equality in business by Chinese law. 

• I think you are more concerned about paying lesstaxes and getting more benefits, right?

• All other managing directors and managers wouldbe nominated and agreed upon by both parties through consultations.

• What about the investment proportion of the twoparties?

• You may approach the Bank of America for ourcredit standing （资信情况）.

•  Are you optimistic about its future?

•  We'll contribute a site and the required plantbuilding.

• I want to know more about the joint venture policy ofyour country.

• Can we remit our profit to foreign countries?

• It will certainly attract many technicians whoare in search of a higher pay and a better employer.

• Don't you think that wages are the key factor inmotivating the staff （激励员工）？

• To gain the market share, we must increase oursales

• We also provide preferential treatment for theinvestors.

• I would like to addthat a joint venture has a Tax Holiday （免税期）fora certain period.

• We have adopted favorable policies to absorbforeign capital.

III. Complete the following dialogue bymaking sentences with the help of the key words given In brackets.

A: 1.                        ______________________  (how, large, total, amount, capital, stock)?

B: I think the joint venture should have acapital stock of at least one million US dollars.

A: All right. 2.                                                                  (how many, share, capital, stock,divide)?

B: Thisquestion will be settled later in the letter of intent (意向书). Now, 3.                                               _

                                            (let we, decide on, ratio,contribution, two, side).

     A: Yes, the ratio of the contributions! 4.                                                                        (this, also, have to, stipulate,in, letter of intent).

B: On behalf of the Chineseside 5.                                                                             (I, suggest, yourside . investment, 49%, total,capital, stock).

A:49%? well. 6.                                                         (I. can, not, give, definite, answer, right now), but I'll let you knownext week.

B： All right. Then we've agreed that one million US dollars is going to bethe registered capital stock of the joint venture.

A： Precisely. Another point ought to be made clear in the letter ofintent.

B: What is it then?

A: Thai is, if either of the two sides should ever 7.                                               (want, transfer, share, capital stock, to, some outsiders), that canonly be done 8.                                                                                         (with, consent, agreement, other side).

B: Yes, of course.

IV.Learn tocommunicate in the situation given below.

Student A: a representative from a Chinese company

Student B: a representative from a Canadian company

The two companies agreed to set up a jointventure. A and B are talking about the content of the letter of intent. Make a conversationcovering the following items.

registered capital

contribute

cash, factory buildings and premises

machinery and equipment with technology

general directors

nominate

through consultation