Joint Ventures in China: Access the Market or Lose Your IP?

Breaking down five cases of Chinese-foreign projects from the past month

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Joint Ventures in China: Access the Market or Lose Your IP?

Last week, Chinese President Xi Jinping toured Southeast Asia to sell the region on China's economic strength and stability—in contrast to the current U.S. administration's disruptive approach to the global trade order. Given the unpredictable and often conflicting signals coming from the U.S., it's understandable that many countries find China's charm offensive appealing, and Vietnam, Malaysia, and Cambodia signed agreements that will further integrate their economies with China in the coming years. Beyond Southeast Asia, major firms in Europe, the Middle East, and elsewhere continue to pursue joint ventures with Chinese companies, especially in strategic, cutting edge industries.

However, international joint ventures (JVs) with Chinese companies have historically functioned both as tools for economic integration and as conduits for involuntary technology transfers. While these partnerships may offer foreign firms access to China's vast market, they are also fraught with geopolitical and intellectual property risks.

Drawing on recent reports and case studies, this analysis breaks down these threats, examines current trends in Chinese overseas partnerships, and discusses the evolving policy landscape concerning foreign investment in China. It also highlights five recent Chinese-foreign joint ventures and cooperative initiatives from the past month, illustrating the potential dangers in each case. These examples range from an Israeli semiconductor firm to a major European biopharmaceutical company, all strategically partnering with Chinese entities.

Let’s take a closer look.