Alpha Individual Discussion Question
ûý õ# #
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�##4<<</#,YH\#0DQDJHPHQW#6HUYLFHV# 9HUVLRQ=##+$,#5335043054# # # #
2XU# LQYHVWPHQW# LQ# WKLV# FXVWRPHU# KDV#EHHQ# HQRUPRXV#²# VHYHUDO# PLOOLRQV#RI#GROODUV#LQ#WRROLQJ/#YDOXDEOH#WLPH#RI#RXU#VHQLRU#GHVLJQ#DQG# SURGXFWLRQ#HQJLQHHUV/#DQG#WRS#PDQDJHPHQW#²#\HW#QHJRWLDWLRQV#KDYH# VWDOOHG# DJDLQ1# # $IWHU# RYHU# D# \HDU# RI# JRLQJ# EDFN# DQG# IRUWK# ZLWK# QRWKLQJ#WR#VKRZ#IRU#RXU#HIIRUWV/#WKLV#LV#LW#²#WKLV#WLPH#ZH¶UH#SOD\LQJ# IRU#NHHSV1#
-XOLH#1HOVRQ# #*HQHUDO#0DQDJHU/#$OSKD#*HDULQJ#6\VWHPV#6KDQJKDL#&R1/#/WG1#
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³,#QHHG#WR#NQRZ#ZKDW#WR#GR#ZLWK#RXU#LQYHVWPHQW#²#,#FDQ¶W#MXVW#OHW# PLOOLRQV#RI#GROODUV#ZRUWK#RI#PDFKLQHU\#VLW#LGOH#RQ#RXU#IDFWRU\#IORRU1´# # #
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#5# <$<<&347# # #
$/3+$#*($5,1*#6<67(06#6+$1*+$,#&21/#/7'1## # $OSKD#*HDULQJ#6\VWHPV#,QF1#+$*6,/#EDVHG#LQ#,OOLQRLV/#8161$1#RIIHUHG#D#IXOO#UDQJH# RI#SURGXFWV#DQG#VHUYLFHV#IRU#SURGXFHUV#RI#PRWRUL]HG#YHKLFOHV/#XVHG#LQ#D#P\ULDG#RI# LQGXVWULHV#WKURXJKRXW#WKH#ZRUOG1##6HUYLFHV#RIIHUHG#E\#$*6#LQFOXGHG#IXOO#PRWRUL]HG# JHDULQJ#V\VWHPV/#JHDULQJ#FRPSRQHQW#DQDO\VLV/#JHDULQJ#LQWHJUDWLRQ#DQG#IXOO#JHDULQJ# V\VWHPV#GHVLJQ#RSWLPL]DWLRQ1##$*6¶#SDUHQW/#$OSKD#0RWRUL]HG#6\VWHPV#,QF1#+$06,/# ZDV# WKH#ZRUOG¶V#PRVW#GLYHUVLILHG#VXSSOLHU#RI#PRSHG/#PRWRUF\FOH/#DQG# LQGXVWULDO# PDFKLQHU\#FRPSRQHQWV#DQG#V\VWHPV/#ZLWK#RYHU#83/333#HPSOR\HHV#LQ#59#FRXQWULHV/# ;4#PDQXIDFWXULQJ#RSHUDWLRQV/#4<#MRLQW#YHQWXUHV#+-9V,/#DQG#4:#WHFKQLFDO#FHQWUHV1### # $OSKD#6KDQJKDL#ZDV#HVWDEOLVKHG# LQ#4<<8#DV#D#-9#RI#$*6#DQG#.DL#/L#0DFKLQH# 6\VWHPV#+.DL#0DFKLQH,/#RQH#RI#&KLQD¶V#ODUJHVW#PDQXIDFWXUHUV#RI#JHDULQJ#V\VWHPV# IRU#PRSHGV#DQG#PRWRUF\FOHV#LQ#&KLQD#LQ#WHUPV#RI#SURGXFWLRQ#FDSDFLW\#DQG#PDUNHW# VKDUH1###$IWHU#PDQ\#PRQWKV#RI#FDUHIXO#VHDUFKLQJ/#.DL#0DFKLQH#KDG#EHHQ#LGHQWLILHG# DV#D#ZHOO0VXLWHG#SDUWQHU#WR#IDFLOLWDWH#$*6¶#HQWU\#LQWR#&KLQD1##7KH#DUUDQJHPHQW#ZDV# RQH# ZLWK# VWURQJ# V\QHUJ\# ²# .DL# 0DFKLQH# ZDV# SOHDVHG# WR# JDLQ# LQFUHDVHG# WHFKQRORJLFDO# H[SHUWLVH# DQG# DFFHVV# WR# ILQDQFLQJ# DQG# $*6# ZHUH# SOHDVHG# WR# EH# ZRUNLQJ#ZLWK#D#SDUWQHU#ZKRVH#PDQDJHPHQW#SKLORVRSK\#DQG#SHUVSHFWLYH#RQ#TXDOLW\# FORVHO\#DOLJQHG#ZLWK#WKHLU#RZQ1##0RUHRYHU/#$*6#ZDV#SOHDVHG#WR#EH#ZRUNLQJ#ZLWK#D# SDUWQHU#ZLWK#YDOXDEOH#PDUNHW#LQVLJKW#DQG#H[SHULHQFH1## # $*6¶#6KDQJKDL# -9#KDG#EHHQ#YHU\# VXFFHVVIXO/#ZLWK# VDOHV# LQFUHDVLQJ# IURP# 41;<# PLOOLRQ#50%4#LQ#4<<8#WR#61;:#PLOOLRQ#50%#LQ#4<<9#DQG#DOPRVW#9#PLOOLRQ#50%#LQ# 4<<:1# #7KH#RULJLQDO#ZRUNIRUFH#RI#4/633#HPSOR\HHV#KDG#DOPRVW#GRXEOHG# WR#RYHU# 5/833# E\# 4<<;1# # $OSKD# 6KDQJKDL# ZDV# FRQVLGHUHG# E\# $*6# WR# EH# WKHLU# PRVW# VXFFHVVIXO#MRLQW#YHQWXUH#LQ#WKH#$VLD03DFLILF#UHJLRQ/#DQG#E\#4<<;#WKH#HQWHUSULVH#KDG# EHFRPH#WKH#EHQFKPDUN#IRU#$*6¶#-9V#WKURXJKRXW#$VLD1##$*6#ZDV#HVSHFLDOO\#SURXG# RI#WKH#ZRUOG0FODVV#TXDOLW\#RI#1HOVRQ¶V#RSHUDWLRQ#LQ#6KDQJKDL/#JLYHQ#WKDW#IRU#D#-9#WR# SURGXFH#DW# WKDW# OHYHO#RI#TXDOLW\#ZDV#D# VLJQLILFDQW#FKDOOHQJH# LQ#&KLQD1# #1HOVRQ# H[SODLQHG#$*6¶#ZRUOGZLGH#FRUSRUDWH#GHGLFDWLRQ#WR#TXDOLW\=# #
,Q#WKH#:HVWHUQ#FXOWXUH/#ZH#IHHO#D#YHU\#VWURQJ#UHVSRQVLELOLW\#WR#WKH# PRWRUF\FOH#RU#PRSHG#RZQHU/#DQG#ZH#DUH#QRW#ZLOOLQJ#WR#FRPSURPLVH# RQ#WKHVH#LVVXHV1#:KDW#ZH#ILQG#KHUH#+LQ#&KLQD,#LV#WKDW#ORFDO#SURGXFHUV# DQG#VXSSOLHUV#KDYH#D#KLJKHU#SURSHQVLW\#WR#FRPSURPLVH1##$OVR/#WKH\# ZLOO#ZRUU\#DERXW#FXVWRPHU#VDWLVIDFWLRQ#LQ#D#GLIIHUHQW#ZD\#²#ODWHU# +L1H1#DIWHU#SURGXFWLRQ,1#:H#ZRUU\#DERXW#FXVWRPHU#VDWLVIDFWLRQ#LQ#WKH# GHVLJQ#HQYLURQPHQW1###
# 7KRXJK# $*6# ZDV# WKH# OHDGHU# LQ# WKH# JOREDO# JHDULQJ# V\VWHPV# PDUNHW# ZLWK# DSSUR[LPDWHO\#83#SHU#FHQW#RI#WKHLU#VDOHV#RXWVLGH#RI#1RUWK#$PHULFD/#LWV#PDUNHW#VKDUH# LQ#$VLD#ZDV#EHORZ#GHVLUHG# OHYHOV1# #7R# LQFUHDVH#$VLDQ#PDUNHW#VKDUH/#$*6#KDG# FUHDWHG#D#VWUDWHJLF#SODQ#WR#LQFUHDVH#SURGXFWLRQ#LQ#WKH#UHJLRQ#E\#58#SHU#FHQW#WKURXJK# ########################################################### 4#4#&KLQHVH#<XDQ#5HQPLQEL#HTXDOHG#86'3145#DW#WKH#WLPH#RI#WKH#FDVH#
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#6# <$<<&347# # # LQYHVWPHQWV#LQ#ORFDO#SURGXFWLRQ#IDFLOLWLHV/#ZLWK#ORFDO#SDUWQHUV/#XVLQJ#ORFDO#VXSSOLHU# QHWZRUNV1###7KLV#SODQ#ZDV#LQWHQGHG#WR#³XQGHUVFRUH#$*6¶#ORQJ0WHUP#FRPPLWPHQW#WR# WKH# UHJLRQV# ZKHUH# ZH# ZLOO# EH# RSHUDWLQJ/´# DFFRUGLQJ# WR# WKH# FRPSDQ\¶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¶6#0$1$*(0(17#7($0# # 1HOVRQ# KDG# EHHQ# ZLWK# $*6# VLQFH# JUDGXDWLQJ# ZLWK# D# PDVWHU¶V# RI# EXVLQHVV# DGPLQLVWUDWLRQ#GHJUHH#LQ#4<;6/#ZRUNLQJ#KHU#ZD\#XS#TXLFNO\#WKURXJK#WKH#UDQNV#GXH# WR#KHU#EXVLQHVV#DFXPHQ/#GULYH#DQG# OHDGHUVKLS# VWUHQJWKV1# #6KH#KDG#D# UHSXWDWLRQ# DPRQJ#WKRVH#ZKR#ZRUNHG#ZLWK#KHU#DV#D#KDUG0GULYLQJ/#IDLU#OHDGHU/#ZKR#VSRNH#KHU# PLQG1## # %HIRUH#KHU#SURPRWLRQ#WR#JHQHUDO#PDQDJHU#RI#$OSKD#6KDQJKDL#+RQH#RI#WKH#WRS#WKUHH# $*6# SRVWLQJV# LQ# &KLQD,/# 1HOVRQ# KDG# EHHQ# WKH# GLUHFWRU# RI# $*6¶# LQWHUQDWLRQDO# GLYLVLRQ1##1HOVRQ#KDG#JDLQHG#VLJQLILFDQW#LQWHUQDWLRQDO#H[SHULHQFH#LQ#WKLV#GLYLVLRQ/# ZKLFK# LQFOXGHG# SRVWLQJV# LQ# 0H[LFR# DQG# (XURSH# IURP# 4<;<# WR# 4<<:1# # $*6¶# LQWHUQDWLRQDO# FOLHQW# SURILOH# LQFOXGHG# ODUJH# PXOWLQDWLRQDOV# SUHGRPLQDQWO\# IURP# (XURSH/# WKRXJK# PDQ\# ZHUH# $VLDQ0EDVHG# GLYLVLRQV# RI# PXOWLQDWLRQDO# PRSHG# PDQXIDFWXUHUV1# # +HU# UHVSRQVLELOLWLHV# LQFOXGHG# RYHUVHHLQJ# WKH# HQJLQHHULQJ/# PDQXIDFWXULQJ/#RSHUDWLRQV#DQG#VDOHV# IXQFWLRQV1# #1HOVRQ#KDG#EHHQ# WUDQVIHUUHG# WR# $*6¶#6KDQJKDL#RSHUDWLRQ#LQ#-XO\#RI#4<<:/#DQG#PRYHG#ZLWK#KHU#KXVEDQG#DQG#WKUHH# GDXJKWHUV#WR#6KDQJKDL1##$OWKRXJK#WKLV#ZDV#KHU#ILUVW#DVVLJQPHQW#LQ#$VLD/#ZLWKLQ#D# IHZ# ZHHNV# ERWK# 1HOVRQ# DQG# KHU# IDPLO\# ZHUH# IHHOLQJ# FRPIRUWDEOH# OLYLQJ# LQ# 6KDQJKDL=# #
,W¶V#EHHQ#D#JRRG#H[SHULHQFH#IRU#P\VHOI#DV#ZHOO#DV#P\#IDPLO\#EXW#LW¶V# EHHQ#TXLWH#DQ#DGMXVWPHQW1##7KHUH¶V#GLIIHUHQW#WKLQNLQJ#KHUH1##'HVSLWH# WKH#IDFW#RXU#FXVWRPHU#SURILOH#PDWFKHG#WKDW#RI#WKH#SUHYLRXV#GLYLVLRQ#,# UDQ#²#(XURSHDQ#DQG#$VLDQ#FXVWRPHUV#²#,¶P#ILQGLQJ#EXVLQHVV#KHUH# WR#EH#D#YDVWO\#GLIIHUHQW#SURFHVV1### # 0DQ\#WKLQJV#WKDW#DUH#FULWLFDO#LVVXHV#WR#WKHP/#DUHQ¶W#QHFHVVDULO\#WKH# VDPH#FULWLFDO# LVVXHV#DV# WKH\#DUH# LQ# WKH#8161# #)RU#H[DPSOH/# LQ# WKH# 8161/#ZH¶UH#FRQVWDQWO\#WU\LQJ#WR#GHILQH#KRZ#ZH#FDQ#UXQ#RSHUDWLRQV#
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#7# <$<<&347# # #
ZLWK#WKH#OHDVW#QXPEHU#RI#SHRSOH1##7KDW¶V#WKH#RSSRVLWH#GULYHU#KHUH/# ZKHUH#WKH#REMHFWLYH#LV#WR#HQVXUH#HPSOR\PHQW1##,W¶V#FKDOOHQJLQJ/#EXW# RQFH#\RX#XQGHUVWDQG#ZKDW#WKHLU#QHHGV#DUH/#DQG#ZKDW#\RXU#QHHGV#DUH/# WKHQ#\RX#FDQ#ILQG#D#YHU\#VXFFHVVIXO#VROXWLRQ#IRU#ERWK#RI#\RX1##<RX# MXVW#KDYH#WR#XQGHUVWDQG#IURP#ZKDW#SHUVSHFWLYH#HDFK#RI#\RX#HQWHUV# WKH#EXVLQHVV#UHODWLRQVKLS1# #
1HOVRQ#FRQWLQXHG/#VD\LQJ#³WKH#ELJ#GLIIHUHQFH#EHWZHHQ#GRLQJ#EXVLQHVV#LQ#&KLQD#DQG# WKH#:HVW# LV# WKDW# LQ#&KLQD# \RX# FUHDWH# D# UHODWLRQVKLS# ILUVW/# WKHQ# HYHU\WKLQJ# HOVH# IROORZV1´##6KH#H[SODLQHG=# #
,W¶V#OLNH#D#WULDQJOH#²#\RX#VWDUW#ZLWK#WKH#UHODWLRQVKLS#DW#WKH#EDVH#DQG# WKHQ# WDON#DERXW#SULFH/# WHUPV/#HWF1# #6R# LI#\RX#FUHDWH#D# VXFFHVVIXO# UHODWLRQVKLS/#HDFK#SDUW\#XQGHUVWDQGV#WKDW#WKH\#ZLOO#WDNH#FDUH#RI#HDFK# RWKHU#²# WKH\#ZLOO#QHYHU#VWUDQG#\RX# LQ#HVVHQFH/#RQ# LVVXHV/# LI#\RX# KDYH#WKH#DSSURSULDWH#UHODWLRQVKLS1#
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
:H#VSHQG#D#ORW#RI#WLPH#WRJHWKHU#²#P\#SDUWQHU#LV#LQ#WKH#GD\0WR0GD\# EXVLQHVV/#ZKLFK#PDNHV#D#ELJ#GLIIHUHQFH1##8QOLNH#RWKHU#SDUWQHUV#ZKR# PD\EH# VWRS# LQ#HYHU\# WZR#ZHHNV#DV# ILJXUHKHDGV/#RXU#SDUWQHU#KDV# IXQFWLRQDO# UHVSRQVLELOLWLHV# ZLWKLQ# WKH# FRPSDQ\/# VR# WKDW# JLYHV# XV# EXVLQHVV#LVVXHV#WR#GHDO#ZLWK/#UDWKHU#WKDQ#MXVW#SDUWQHU#LVVXHV1###
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
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#8# <$<<&347# # # QHJRWLDWRU#RQ# WKH#6DQ#<X#DFFRXQW1# #$FFRUGLQJ# WR#1HOVRQ/#ZKHQ#VKH#ILUVW#EHJDQ# WDONLQJ#ZLWK#7LDQPLQ/#KH#ZRXOG#³JR#DURXQG#DQG#DURXQG#LQ#FLUFOHV1´##+RZHYHU/#DIWHU# VHYHUDO#PRQWKV/#KH#ZDV#PRUH#LQFOLQHG#WR#VD\/#IRU#H[DPSOH/#³WKDW¶V#QRW#D#JRRG#LGHD´# +DQG#H[SODLQ#ZK\,#PXFK#VRRQHU1##1HOVRQ#H[SODLQHG=# #
7KRXJK#ZH#KDG#WR#JR#WKURXJK#WKLQJV#WLPH#DQG#WLPH#DJDLQ/#ZH#ZHUH# GHGLFDWHG#WR#ZRUNLQJ#WKURXJK#D#QXPEHU#RI#PLVXQGHUVWDQGLQJV/#DQG# WKDW¶V#DOORZHG#XV#QRZ#WR#EH#PRUH#GLUHFW#LQ#RXU#FRPPXQLFDWLRQV1##,W# KHOSV#WKDW#,#FDQ#QRZ#XQGHUVWDQG#WKHLU#LVVXHV#²#WKH\#FDQ#QRZ#IUDPH# WKHP#IDLUO\#GHFHQWO\#IRU#PH1### # :H#FDQ#QRZ#GR#LQ#ILYH#PLQXWHV#ZKDW#XVHG#WR#WDNH#48#RU#531#$OVR/# ZH#KDYH#FRPH#WR#WDON#IUDQNO\#UHJDUGLQJ#RXU#RSLQLRQV#²#7LDQPLQ# NQRZV#YHU\#ZHOO#ZKHUH#,#VWDQG#RQ#HYHU\#LVVXH#DQG#YLFH#YHUVD1#
# 7DONLQJ# ³LQ# FLUFOHV´# ZDV# D# YHU\# W\SLFDO# &KLQHVH# PDQQHU# RI# FRPPXQLFDWLQJ/# DFFRUGLQJ#WR#1HOVRQ1##'XULQJ#LQLWLDO#PHHWLQJV#ZLWK#.DL#0DFKLQH#PDQDJHUV/#1HOVRQ# IRXQG#WKDW#WKH\#ZRXOG#QRW#IRFXV#RQ#NH\#LVVXHV#EXW#LQVWHDG#ZRXOG#UHLWHUDWH#LVVXHV# WKDW#ZHUH#QRW#RSHQ#WR#FRQWHQWLRQ1##7KXV/#DIWHU#DERXW#48#PLQXWHV/#1HOVRQ#ZRXOG#VD\/# ³-XVW# WHOO#PH#ZKDW#\RX¶UH#KHUH#IRU#²#,¶P#QRW#JRLQJ# WR#SXQLVK#\RX1´# #1HOVRQ¶V# IHHOLQJ#DERXW#ZK\#WKHVH#PDQDJHUV#ZHUH#UHWLFHQW#ZDV#WKHLU#IHDU#WKDW#WKH\#ZRXOG#EH# GLVDGYDQWDJHG# RU# WKHLU# UHSXWDWLRQV# ZRXOG# EH# PDUUHG# E\# D# PRUH# GLUHFW# FRPPXQLFDWLRQ1##1HOVRQ#H[SODLQHG=# #
7KH\#WKLQN#WKDW#,¶P#JRLQJ#WR#EH#GLVDSSRLQWHG#RU#DQJU\#ZLWK#WKHP1## 7KH#PDQDJHUV#WKDW#KDYH#PHW#ZLWK#PH#NQRZ#QRZ#WKDW#WKDW¶V#QRW#D# ULVN/#VR#WKH\#NQRZ#WKDW#WKH\#FDQ#JHW#ULJKW#WR#WKH#SRLQW1##7KH#RWKHU# RQHV#DUH#WU\LQJ#WR#IHHO#PH#RXW1##0\#IHHOLQJ#LV#WKDW#LI#WKH\#IHHO#WKHUH¶V# D#GDQJHU#,¶P#JRLQJ#WR#EH#DQJU\#ZLWK#WKHP/#WKH\#OHDYH#WKH#GLVFXVVLRQ# REVFXUH#HQRXJK#VR#,#UHDOO\#GRQ¶W#NQRZ#ZKDW#WKH\#FDPH#WR#PH#WR#WDON# DERXW1##,W¶V#MXVW#WKHLU#ZD\#²#WKH\¶UH#MXVW#QRW#GLUHFW1#
# :KDW# ,# WU\# WR#GR# LV# WR#FUHDWH#D#FXOWXUH#DURXQG#PH# WKDW# LV#QRW#D# GLVFLSOLQDU\#FXOWXUH1##,#ZLOO#QRW#SXQLVK#VRPHERG\#ZKR#WHOOV#PH#EDG# QHZV1# #%XW#QRW#HYHU\ERG\# LV#FRPIRUWDEOH#ZLWK#WKDW1# #+RZHYHU/#LQ# WLPH/#,#IHHO#WKDW#WKH\#ZLOO#FRPH#WR#NQRZ#ZKDW#W\SH#RI#PDQDJHU#,#DP# DQG#ZKDW#W\SH#RI#ZRUN#HQYLURQPHQW#,#ZLVK#WR#IRVWHU1#
# 7KLV# GHVLUH# WR# FUHDWH# D# QRQ0WKUHDWHQLQJ# FXOWXUH# ZLWKLQ# $OSKD# 6KDQJKDL# ZDV# SDUWLFXODUO\#FULWLFDO#LQ#OLJKW#RI#WKH#FKDOOHQJHV#$OSKD#6KDQJKDL¶V#QHJRWLDWLQJ#WHDP# KDG#IDFHG#LQ#WKHLU#HIIRUWV#WR#UHDFK#D#PXWXDOO\#DJUHHDEOH#VXSSOLHU#FRQWUDFW#ZLWK#6DQ# <X1# #7KH#QHJRWLDWLRQV#ZHUH#QRW#DGYDQFLQJ#DV#VWHDGLO\#DV#1HOVRQ#KDG#KRSHG#DQG# IUHTXHQWO\#QHJDWLYH/#UDWKHU#WKDQ#SRVLWLYH/#QHZV#PDGH#LWV#ZD\#EDFN#WR#KHU#RIILFH1## # #
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#9# <$<<&347# # #
6$1#<8#&21/#/7'1#²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¶V# SURGXFWLRQ#H[SHUWLVH1##7KRXJK#([FHO#ZRXOG#WDNH#DQ#DFWLYH#DGYLVRU\#UROH#LQ#HYHU\# IDFHW#RI#6DQ#<X¶V#RSHUDWLRQV/#6DQ#<X¶V#PDMRULW\#RZQHUVKLS#PHDQW#WKDW#WKH\#ZHUH# XQLODWHUDOO\# UHVSRQVLEOH# IRU# PDNLQJ# RSHUDWLRQDO/# PDQDJHPHQW# DQG# VWUDWHJLF# GHFLVLRQV1## # ([FHO#0RWRUV#ZDV#RQH#RI#WKH#ZRUOG¶V#ODUJHVW#SURGXFHUV#RI#LQGXVWULDO/#FRPPHUFLDO# DQG#FRQVXPHU#PRWRUL]HG#SURGXFWV1# #([FHO#ZDV#HDJHU# WR#SHQHWUDWH#&KLQD#²# WKH# ZRUOG¶V# ODUJHVW#DQG# IDVWHVW0GHYHORSLQJ#PDUNHW#²#ZLWK#SURGXFWV# WKDW#ZHUH#ZHOO# VXLWHG# WR#ERWK#&KLQD¶V# LQGXVWULDO#EDVH# DQG# WKHLU#YDVW#SRSXODWLRQ# WKDW# UHOLHG#RQ# PRSHGV#DQG#PRWRUL]HG#YHKLFOHV#DV#WKHLU#SULPDU\#PRGH#RI#WUDQVSRUWDWLRQ1##([FHO#KDG# SUHYLRXVO\#DWWHPSWHG#HQWU\#LQWR#WKH#&KLQHVH#PDUNHW#WKURXJK#WKHLU#RZQ#SURGXFWLRQ# IDFLOLWLHV>#+DOVR#DV#D#-9#ZLWK#D# ORFDO#PDQXIDFWXUHU,#KRZHYHU/# WKH#YHQWXUH#+ZKLFK# SURGXFHG# PRSHGV# IRU# WKH# GRPHVWLF# PDUNHW,# GLG# QRW# SURYH# VXFFHVVIXO# DQG# SURGXFWLRQ#ZDV#KDOWHG#ZLWKLQ#WKH#ILUVW#\HDU1### # /RRNLQJ# LQWR# WKH#IXWXUH/#KRZHYHU/#([FHO#ZDV#DFWLYHO\#VHHNLQJ#RWKHU#-9#SDUWQHUV# ZLWK#ZKRP#WKH\#FRXOG#WDNH#DQ#H[SDQGHG#UROH/#ZLWK#D#YLHZ#WR#SURGXFLQJ#WKHLU#RZQ# SURGXFW#OLQHV#IRU#WKH#&KLQHVH#PDUNHW1##,Q#WKH#LQWHULP/#KRZHYHU/#LW#ZDV#KRSHG#WKDW# WKH# -9# ZLWK# 6DQ# <X# &R1# /WG1# ZRXOG# VHUYH# DV# DQ# LQFXEDWRU# ZKHUH# ([FHO# PDQDJHPHQW# FRXOG# JDLQ# NQRZOHGJH# RI# WKH# PDUNHW# DQG# RI# &KLQHVH# EXVLQHVV# SUDFWLFHV1# #7KXV/# LW#ZDV#KRSHG# WKDW# WKH#6DQ#<X#-9#ZRXOG#SURYH#VXFFHVVIXO#DV#D# PRGHO#IRU#HQWU\# LQWR# WKH#TXLFNO\#H[SDQGLQJ#&KLQHVH#PDUNHW/#DQG#DV#D# ODQGPDUN# RSHUDWLRQ#ODXQFKLQJ#([FHO¶V#H[SDQGHG#SUHVHQFH#LQ#WKH#PDLQODQG1### # +RZHYHU/#WKHUH#ZDV#VRPH#TXHVWLRQ#LQ#1HOVRQ¶V#PLQG#DV#WR#ZKHWKHU#WKH#6DQ#<X#&R1# /WG12([FHO#-9#ZRXOG#XOWLPDWHO\#PHHW#WKHLU#LQWHQGHG#JRDOV1##$FFRUGLQJ#WR#1HOVRQ/# WKLV#ZDV#DWWULEXWDEOH#WR#D#GLIIHUHQW#SHUVSHFWLYH#WKDW#HDFK#ILUP#EURXJKW#WR#WKH#-91## ([FHO¶V#SKLORVRSK\#UHJDUGLQJ#TXDOLW\#ZDV#PRUH# W\SLFDOO\#D#:HVWHUQ#SHUVSHFWLYH># ([FHO# IHOW#D#VWURQJ# OR\DOW\# WR#FRQVXPHUV# WR#HQVXUH# WKHLU# VDIHW\#DQG# WR#SURGXFH# PRSHGV# WKDW# ZHUH# VDIH# DQG# UHOLDEOH# DERYH# DQ\# RWKHU# FRQVLGHUDWLRQ1# ,Q# RWKHU# LQWHUQDWLRQDO#PDUNHWV/#([FHO¶V#PRSHGV#ZHUH#SULFHG# LQ# WKH#PLG0PDUNHW# WR#XSSHU0 PDUNHW#SULFH#UDQJH1##%\#FRQWUDVW/#6DQ#<X¶V#EXVLQHVV#PRGHO/#DV#W\SLFDOO\#IRXQG#LQ# PDQ\#&KLQHVH#PDQXIDFWXULQJ# IDFLOLWLHV/#PHDQW# WKDW# WKRXJK# VDIHW\#ZDV#RI#JUHDW# FRQFHUQ/#SULFH#ZDV# WKH#GRPLQDQW# LVVXH#ZKHQ#FRQVLGHULQJ# IDFWRUV#RI#SURGXFWLRQ1##
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#:# <$<<&347# # # 7KLV#GLIIHUHQW#SHUVSHFWLYH#ZLWKLQ#WKH#6DQ#<X0([FHO#-9#ZRXOG#FRPH#WR#VLJQLILFDQWO\# FRPSURPLVH#WKH#SURJUHVV#RI#WKH#QHJRWLDWLRQV#EHWZHHQ#$OSKD#6KDQJKDL#DQG#6DQ#<X1### # # 7+(#1(*27,$7,216## # 7KH# LQWURGXFWRU\#PHHWLQJ#EHWZHHQ#$OSKD#6KDQJKDL#DQG#6DQ#<X# WRRN#SODFH# LQ# $XJXVW# 4<<:# DW# $OSKD# 6KDQJKDL¶V# RIILFHV/# DQG# ZDV# DWWHQGHG# E\# DOO# VHQLRU# PDQDJHPHQW#IURP#ERWK#RUJDQL]DWLRQV1##1HOVRQ#DUUDQJHG#IRU#DQ#H[WHQVLYH#SODQW#WRXU/# IROORZHG#E\#D#WUDGLWLRQDO#&KLQHVH#OXQFKHRQ#FRQVLVWLQJ#RI#VHYHUDO#FRXUVHV/#KRVWHG#E\# $OSKD#6KDQJKDL#LQ#D#SULYDWH#URRP#DW#WKHLU#RQ0VLWH#OXQFK#IDFLOLWLHV1##$IWHU#WKLV#LQLWLDO# PHHWLQJ/#QHJRWLDWLRQV#RFFXUUHG#RQ#D#PRQWKO\#EDVLV/#ZLWK#SHUPDQHQW#UHSUHVHQWDWLYHV# IURP#6DQ#<X#DQG#$OSKD#6KDQJKDL¶V#QHJRWLDWLQJ#WHDPV#PHHWLQJ#WR#GLVFXVV#YDULRXV# WHUPV# WKDW#ZRXOG#GHILQH# WKHLU# UHODWLRQVKLS1#7KHVH# WKUHH0GD\#VHVVLRQV#ZRXOG# WDNH# SODFH# DW# HDFK# RUJDQL]DWLRQ¶V# KHDGTXDUWHUV# RQ# DQ# DOWHUQDWLQJ# EDVLV1# # +RZHYHU/# DFFRUGLQJ#WR#1HOVRQ/#WKH#6DQ#<X#QHJRWLDWLQJ#WHDP#ZDV#DOZD\V#HDJHU#WR#YHQWXUH#WR# 6KDQJKDL# WR#PHHW1# #6DQ#<X#ZDV#KHDGTXDUWHUHG# LQ#DQ# LQGXVWULDO# WRZQ#RYHU# 933# NLORPHWUHV# DZD\# IURP# 6KDQJKDL/# DQG# WKH# WHDP# HQMR\HG# D# EXVLQHVV# WULS# LQWR# 6KDQJKDL/#ZKHUH#DV#SHU#EXVLQHVV#SUDFWLFH#LQ#&KLQD/#$OSKD#6KDQJKDL¶V#QHJRWLDWLQJ# WHDP#ZRXOG#EH#JUDFLRXV#KRVWV#WR#WKHLU#RXW0RI0WRZQ#YLVLWRUV1### # $W#WKH#EHJLQQLQJ#RI#WKHLU#UHODWLRQVKLS/#1HOVRQ#H[SODLQHG#WKDW#HPSOR\HHV#DW#HYHU\# OHYHO#DW#$OSKD#6KDQJKDL#ZHUH#H[FLWHG#DERXW#WKH#EXVLQHVV/#JLYHQ#6DQ#<X¶V#SURILOH#LQ# WKH#&KLQHVH#PRSHG#PDUNHW#DQG#WKH#SRWHQWLDO#LQFRPH1##1HOVRQ#H[SODLQHG#WKDW#VKH# DOVR# HQWHUHG# QHJRWLDWLRQV# RSWLPLVWLFDOO\/# ZLWK# ³HYHU\# LQWHQWLRQ# RI# SXUVXLQJ# D# VXFFHVVIXO# DQG# PXWXDOO\# EHQHILFLDO# UHODWLRQVKLS# ZLWK# 6DQ# <X1´# # 1HOVRQ# ZDV# FRQILGHQW#RI#$OSKD#6KDQJKDL¶V#DELOLW\# WR#EH#D#ZRUOG0FODVV# VXSSOLHU# WR#6DQ#<X/# VD\LQJ#WKDW#$OSKD#6KDQJKDL#FRXOG#³JHW#6DQ#<X#LQWR#SURGXFWLRQ#HIIHFWLYHO\/#ZLWK#RQ# WLPH#GHOLYHU\#RI#TXDOLW\#SDUWV1´##1HOVRQ#WHUPHG#$OSKD#6KDQJKDL¶V#ILUVW#IHZ#PRQWKV# RI#QHJRWLDWLRQV#ZLWK#6DQ#<X#DV#³VHWWLQJ#WKH#VWDJH´#IRU#IXUWKHU#QHJRWLDWLRQV=# #
,Q#&KLQD/#\RX#GRQ¶W#QHHG#D#FRQWUDFW#WR#HQWHU#LQWR#EXVLQHVV1##6R#ZH# VWDUWHG#WR#EHFRPH#PDQXIDFWXULQJ#FDSDEOH/#EDVHG#RQ#WKH#EHOLHI#WKDW# ZH#ZRXOG#EH#DEOH#WR#QHJRWLDWH#WKH#GHWDLOV#LQ#WKH#IXWXUH1##6R#ZH#SXW# RXU#YHU\#EHVW#HIIRUW# LQ#DQG# VSHQW# VHYHUDO#PLOOLRQ#GROODUV#JHWWLQJ# UHDG\# WR# JR# WR# SURGXFWLRQ1# # $OO# DORQJ/# ZH# KDG# VHYHUDO# µQLFH# FRQYHUVDWLRQV¶#ZLWK# WKHP#VD\LQJ# WKDW# WKH\#ZHUH#JHWWLQJ#SUHSDUHG/# DQG#ZH# WDONHG#DERXW#SULFH#DQG#RWKHU# WHUPV/#EXW#ZH#QHYHU# UHDOO\# HQWHUHG#LQWR#VHULRXV#QHJRWLDWLRQV1#
## %\#1RYHPEHU/#6DQ#<X#UHTXLUHG#WKHLU#ILUVW#VKLSPHQW1##$OSKD#6KDQJKDL#KDG#SODQQHG# WR#EH#SURGXFWLRQ0FDSDEOH#E\#WKDW#WLPH>#KRZHYHU/#E\#WKH#WLPH#6DQ#<X#JDYH#WKH#JUHHQ# OLJKW/#LW#ZDV#WRR#ODWH#IRU#$OSKD#6KDQJKDL#WR#UDPS#XS#WRROLQJ#IRU#SURGXFWLRQ#RI#WKH# UHTXLUHG#SDUWV1##7KHUHIRUH/#LQ#D#PRYH#WKDW#FRXOG#SURYH#FRVWO\#WR#$OSKD#6KDQJKDL#EXW# WKDW#ZDV#FRQVLGHUHG#D#QHFHVVDU\#JHVWXUH#RI#JRRGZLOO/#1HOVRQ#DUUDQJHG#IRU#WKH#SDUWV#
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
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¶V# GLVFRPIRUW# ZLWK# VKLSSLQJ# XQLWV# ZLWKRXW#D#SULFH/#VKH#ZDV#DVVXUHG#E\#KHU#VHQLRU#PDQDJHPHQW#WKDW#WKLV#ZDV#W\SLFDO#LQ# &KLQHVH#VXSSOLHU#DUUDQJHPHQWV1## # 'HVSLWH#VXFK#UHDVVXUDQFHV/#LW#ZDV#DW#WKLV#SRLQW#WKDW#1HOVRQ#EHJDQ#WR#TXHVWLRQ#$OSKD# 6KDQJKDL¶V#DELOLW\#WR#FUHDWH#D#VWDEOH#DQG#WUXVWLQJ#UHODWLRQVKLS#ZLWK#6DQ#<X1##9DULRXV# SRLQWV#RI#FRQWHQWLRQ#EHJDQ#WR#VXUIDFH/#LQFOXGLQJ#RQH#RI#WKH#PRVW#SUHVVLQJ#LVVXHV#²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µIDFH¶5#LQ#QHJRWLDWLRQV1##0RUHRYHU/#WKH\# FRXOG#QRW#FXW#FRUQHUV#RQ#TXDOLW\#RU#GHDO#ZLWK#DQ\#RWKHU#WKDQ#H[SHQVLYH/#KLJK0TXDOLW\# IRUHLJQ#VXSSOLHUV/#EHFDXVH#RI#WKH#QHHG#WR#JXDUG#WKHLU#JOREDO#UHSXWDWLRQ#IRU#TXDOLW\1## # 'HVSLWH# WKHVH# FKDOOHQJHV# LQ# UHDFKLQJ# FRQWUDFWXDO# DJUHHPHQW/# $OSKD# 6KDQJKDL# FRQWLQXHG#WR#WRRO#WKHLU#OLQHV#LQ#SUHSDUDWLRQ#RI#EHFRPLQJ#SURGXFWLRQ0FDSDEOH/#DQG#D# VL[0PRQWK#FRQWUDFW#ZDV#VLJQHG#LQ#ZKLFK#$OSKD#6KDQJKDL#DJUHHG#WR#VXSSO\#SDUWV#WR# 6DQ#<X#²#VWLOO#ZLWK#QR#SULFH1#1HOVRQ¶V#GLVFRPIRUW#ZLWK#QHJRWLDWLQJ#ZLWKRXW#ILUVW# FRPLQJ#WR#D#FRQVHQVXV#UHJDUGLQJ#SULFH#ZDV#JURZLQJ/#HVSHFLDOO\#LQ#DQ#HQYLURQPHQW# RI#LQFUHDVLQJ#GLVWUXVW#E\#1HOVRQ1##+RZHYHU/#.DL#0DFKLQH#VHQLRU#PDQDJHPHQW#DQG# WKH#QHJRWLDWLQJ# WHDP#FRQWLQXHG# WR#DVVXUH#KHU# WKDW# WKH#QHJRWLDWLRQV#KDG#DGYDQFHG# ZLWKLQ# WKH#ERXQGV#RI# W\SLFDO#VXSSOLHU#UHODWLRQVKLSV# LQ#D#&KLQHVH#FRQWH[W1# #7KXV/# $OSKD#6KDQJKDL#DQG#6DQ#<X#FRQWLQXHG#QHJRWLDWLQJ/#EXW/#DFFRUGLQJ#WR#1HOVRQ#WKH\# EHJDQ#WR#³KLW#GLIIHUHQW#EXPSV#DORQJ#WKH#URDG1´##0RVW#PDUNHGO\/#WKH#LVVXH#RI#SULFH# VXEWO\#FKDQJHG#WR#RQH#RI#UHFRXSLQJ#LQYHVWPHQW1### # 6SHFLILFDOO\/# 1HOVRQ# H[SODLQHG# WKDW# $OSKD# 6KDQJKDL# QHHGHG# WR# DPRUWL]H# WKHLU# LQYHVWPHQW#LQ#6DQ#<X0GHGLFDWHG#HTXLSPHQW#DQG#GHYHORSPHQW#FRVWV#RYHU#D#ILYH0\HDU# SHULRG/#RU#DJDLQVW#D#PLQLPXP#QXPEHU#RI#SDUWV#VKLSSHG1# #7R#PHHW# WKHVH# WHUPV/# $OSKD#6KDQJKDL#ZRXOG#QHHG#WR#EH#6DQ#<X¶V#OHDG#VXSSOLHU1# #+RZHYHU/#LW#EHFDPH# LQFUHDVLQJO\#FOHDU#WR#1HOVRQ#WKDW#6DQ#<X#KDG#D#GLIIHUHQW#LGHD1##+HU#VXVSLFLRQV#ZHUH# ########################################################### 5##7KH#FRQFHSW#RI#µJLYLQJ#IDFH¶#LQ#&KLQHVH#FXOWXUH#LQYROYHG#D#WLPH0KRQRUHG#WUDGLWLRQ#RI#VKRZLQJ#UHVSHFW#IRU# D#FROOHDJXH#RU#IULHQG/#DQG#QRW#HPEDUUDVVLQJ#VRPHRQH#VR#WKDW#WKH\#ZRQ¶W#µORVH#IDFH1¶##
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#<# <$<<&347# # # MXVWLILHG#XSRQ#KHDULQJ#RI#D#6DQ#<X#SURSRVDO#WKDW#ZRXOG#LQYROYH#$OSKD#6KDQJKDL¶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¶V# GHGLFDWHG# PDQXIDFWXULQJ# DUHD1## +RZHYHU/#DW#WKH#HQG#RI#WKH#VL[0PRQWK#FRQWUDFW/#6DQ#<X#LQGLFDWHG#WKDW#WKH\#ZHUH#QRW# ZLOOLQJ# WR#QHJRWLDWH#D# ORQJ0WHUP#FRQWUDFW/#DQG#ZDQWHG# WR#VLJQ#DQRWKHU#VL[0PRQWK# FRQWUDFW1###1HOVRQ¶V#LQWXLWLYH#IHHOLQJ#²#WKDW#IURP#WKH#EHJLQQLQJ#6DQ#<X#KDG#QHYHU# FRQVLGHUHG#GHDOLQJ#ZLWK#$OSKD#6KDQJKDL#IURP#D#ORQJ0WHUP#SHUVSHFWLYH/#DQG#ZHUH# LQWHQW#RQ#XVLQJ#D#ORFDO#VXSSOLHU#²#ZDV#JURZLQJ#VWURQJHU#GDLO\1# # %\#WKLV#WLPH/#;LDRELQ#KDG#DOVR#DWWHPSWHG#QHJRWLDWLRQV#ZLWK#6DQ#<X1##$FFRUGLQJ#WR# 1HOVRQ/#;LDRELQ#KDG#DQ#LPPHQVH#FDSDFLW\#IRU#SDWLHQFH/#GLSORPDF\#DQG#WDFW/#ZKLFK# 1HOVRQ#KDG#VHHQ#KLP#XVH#WR#DYRLG#RU#GLIIXVH#VHYHUDO#WHQVH#VLWXDWLRQV#LQ#WKH#SDVW1## $FFRUGLQJ# WR#1HOVRQ/#³ZKHQ# WKLQJV#JHW#FRQIOLFWLYH/#;LDRELQ# OLNHV# WR#EH# LQ# WKH# PLGGOH1´# 1HOVRQ# FRQWLQXHG/# LQGLFDWLQJ# WKDW# WKRXJK# ;LDRELQ# ³HQWHUHG# WKH# QHJRWLDWLRQV#ZLWK#D#JHQXLQH#KRSH# WKDW# LVVXHV#FRXOG#EH#UHVROYHG/#GHVSLWH#KLV#EHVW# HIIRUWV#DIWHU#MXVW#RQH#URXQG#RI#QHJRWLDWLRQ/#KH#ZDV#VR#IUXVWUDWHG#WKDW#KH#QHYHU#UHDOO\# KDG#KLV#KHDUW#LQ#QHJRWLDWLRQV#DJDLQ1´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¶V#SHUPDQHQW#QHJRWLDWLQJ#WHDP#ZDV#FRPSULVHG#RI#WKUHH#VDOHV#SHRSOH# IURP#.DL#0DFKLQH/#OHDG#E\#7LDQPLQ1#7LDQPLQ#DQG#KLV#WHDP#UHSRUWHG#WR#;LDRELQ/# ZLWK#FRQFXUUHQW#UHSRUWLQJ#UHVSRQVLELOLWLHV#WR#1HOVRQ#ZKR/#DV#JHQHUDO#PDQDJHU#RI# WKH# -9/#KHOG# WKH#XOWLPDWH# UHVSRQVLELOLW\# IRU# WKH#QHJRWLDWLRQV1# #7LDQPLQ#ZRUNHG# FORVHO\#DQG#GLUHFWO\#ZLWK#1HOVRQ/#DQG#LQ#SDUWLFXODU#VSHQW#D#ORW#RI#WLPH#³ILJXULQJ#RXW#
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#43# <$<<&347# # # ZKDW#WKH\#QHHGHG#WR#GR#WR#ZLQ1´##0DQ\#WLPHV#;LDRELQ#ZRXOG#EH#SUHVHQW#IRU#WKHVH# VWUDWHJ\#VHVVLRQV>#KRZHYHU/# LI#KH#ZDV#QRW#DEOH# WR#DWWHQG/#1HOVRQ#ZRXOG#DOZD\V# IROORZ#KHU#SULQFLSOH#RI#³QHYHU#VXUSULVLQJ#KHU#PDQDJHPHQW# WHDP1´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¶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¶V#UHVSHFW#LQ#WKLV#ZD\/#1HOVRQ#IHOW#WKDW#VKH#ZDV#GRLQJ#ZKDW#VKH# FRXOG#WR#LQFUHDVH#WKH#FKDQFHV#RI#WKH#WHDP¶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¶V#$PHULFDQ#-9#SDUWQHU/#([FHO/#ZDV#ODUJHO\#1HOVRQ¶V#GRPDLQ1##0RUHRYHU/#
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#44# <$<<&347# # # VKH#KDG#DFFXPXODWHG#D#VLJQLILFDQW#GHJUHH#RI#H[SHULHQFH#DQG#GHYHORSHG#HIIHFWLYH# ZRUNLQJ#UHODWLRQVKLSV#ZLWK#VHQLRU#PDQDJHPHQW#DW#([FHO¶V#KHDG#RIILFH#DQG#YDULRXV# LQWHUQDWLRQDO#RIILFHV#GXULQJ#KHU#WHQXUH#ZLWK#$*6¶#LQWHUQDWLRQDO#GLYLVLRQ1# # # $/3+$#6+$1*+$,¶6#&20081,&$7,21#:,7+#(;&(/# # 'XULQJ# WKH#QHJRWLDWLRQV/#1HOVRQ#KDG#EHHQ#NHHSLQJ#([FHO#1RUWK#$PHULFD/#([FHO# (XURSH/#DQG#([FHO#&KLQD#IXOO\#LQIRUPHG/#ERWK#LQ#ZULWLQJ#DQG#RYHU#WKH#SKRQH/#RI# WKHLU#SURJUHVV1##+HU#UHDVRQLQJ#EHKLQG#VXFK#IUHTXHQW#DQG#WKRURXJK#FRPPXQLFDWLRQV# ZLWK#([FHO¶V#JOREDO#RIILFHV#ZDV#KHU#EHOLHI#WKDW#LI#VKH#GLG#VR/#([FHO#ZRXOG#DSSUHFLDWH# WKH#GHJUHH#WR#ZKLFK#$OSKD#6KDQJKDL#YDOXHG#WKHLU#EXVLQHVV1##0RUHRYHU/#1HOVRQ#IHOW# WKDW# LW#ZDV#FULWLFDO# WKDW#VKH#FRQYH\# WR#([FHO#KHU#UHDVRQV#IRU#GHFOLQLQJ# WR#DFFHSW# ([FHO¶V#EXVLQHVV# +WKURXJK#6DQ#<X,#RQ# WKH#FXUUHQW# WHUPV#ZHUH#QRW#³EHFDXVH#RI# LJQRUDQFH#RU#ODFN#RI#UHVSHFW#RU#HYHQ#D#JHQHUDO#XQZLOOLQJQHVV#WR#WDNH#WKH#EXVLQHVV# RQ1##5DWKHU/#LW#ZDV#EDVHG#RQ#EXVLQHVV#GHFLVLRQV#DQG#EXVLQHVV#SUDFWLFHV#WKDW#,#ZDV# QRW#ZLOOLQJ#WR#FRPSURPLVH#RQ1´# # ([FHO¶V#UHVSRQVH#WR#1HOVRQ¶V#FRUUHVSRQGHQFH#ZDV#HQFRXUDJLQJ/#FRQYH\LQJ#WR#KHU# WKDW# WKH\# GLG# QRW# IHHO# WKDW# KHU# DFWLRQV# WR# GDWH# ZHUH# XQUHDVRQDEOH# JLYHQ# WKH# FLUFXPVWDQFHV/#HODERUDWLQJ#WKDW#ZKDW#VKH#ZDV#DVNLQJ#IRU#ZDV#³QRW#RXW#RI#ERXQGV1´## 7KLV#UHIOHFWHG# WKH#GHJUHH#RI# WUXVW# WKDW#1HOVRQ#KDG#IRVWHUHG# LQ#KHU#UHODWLRQV#ZLWK# ([FHO#WKURXJK#D#FRQVLVWHQW#GHVLUH#WR#H[FHHG#WKHLU#H[SHFWDWLRQV#DQG#WR#VDWLVI\#WKHLU# QHHGV#DV#D#YDOXHG#JOREDO#FOLHQW#RI#$*61##7KLV#GHVLUH#WR#NHHS#([FHO#VDWLVILHG#ZDV# DOVR# HYLGHQFHG# LQ# WKH# QHJRWLDWLQJ# SDWWHUQ# WKDW# VKH# KDG# HVWDEOLVKHG# ZLWK# ([FHO# &KLQD1## # ,Q# FRQWUDVW# WR# WKH# QHJRWLDWLRQV# EHWZHHQ# 6DQ# <X# UHSUHVHQWDWLYHV# DQG# $OSKD# 6KDQJKDL/#ZKHQ#([FHO¶V#UHSUHVHQWDWLYH#RQ#6DQ#<X¶V#QHJRWLDWLQJ#WHDP#UHTXHVWHG#D# FHUWDLQ#WHUP/#$OSKD#6KDQJKDL#ZRXOG#JHQHUDOO\#DJUHH1##1HOVRQ#IXUWKHU#H[SODLQHG#WKDW# KDG#([FHO#DVNHG#KHU# WR#FRPSURPLVH#RQ#HYHQ# WKH#PRVW#FRQWHQWLRXV#RI# WHUPV#DQG# FRQGLWLRQV/#VKH#ZRXOG#KDYH#FRQVLGHUHG#GRLQJ#VR1##+RZHYHU/#DFFRUGLQJ#WR#1HOVRQ/# WKH\# VHHPHG# WR# DSSUHFLDWH# IXOO\#$OSKD#6KDQJKDL¶V#QHJRWLDWLQJ# VWDQFH# DQG# WKXV# QHYHU#SXVKHG#LW#EH\RQG#D#UHDVRQDEOH#OLPLW1# #1HOVRQ¶V#SULPDU\#FRQVLGHUDWLRQ#ZDV# SURWHFWLQJ#$*6¶#UHODWLRQVKLS#ZLWK#([FHO#DQG#WKHLU#YDULRXV#JOREDO#VXEVLGLDULHV/#DV# SDUW#RI#D# ODUJHU#VWUDWHJLF#EXVLQHVV#FRQWH[W1#7KH#KLJK#VWDQGDUG#RI#FRPPXQLFDWLRQ# DQG#PXWXDO#WUXVW#HVWDEOLVKHG#ZLWK#([FHO#QXUWXUHG#D#JUHDW#GHDO#RI#XQGHUVWDQGLQJ#IRU# 1HOVRQ¶V#SUHGLFDPHQW#UHJDUGLQJ#WKH#VLWXDWLRQ#ZLWK#6DQ#<X1### # 1HOVRQ# DOVR# IXOO\# DSSUHFLDWHG# WKH# LQWHJUDO# UROH# WKDW# DQ# HIIHFWLYH# LQWHUQDO# FRPPXQLFDWLRQV#VWUDWHJ\/#WDLORUHG#WR#WKH#&KLQHVH#ZRUN#HQYLURQPHQW/#ZRXOG#SOD\#LQ# WKH#VXFFHVV#RI#WKH#6KDQJKDL#-9#DV#D#ZKROH#DQG#WULHG#WR#FRPPXQLFDWH#DV#HIIHFWLYHO\# ZLWK#KHU#HPSOR\HHV1# # #
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#45# <$<<&347# # #
$/3+$#6+$1*+$,¶6#,17(51$/#&20081,&$7,21## # :KHQ#VKH#ILUVW#MRLQHG#$OSKD#6KDQJKDL/#1HOVRQ#IRXQG#WKDW#FRPPXQLFDWLRQ#GLG#QRW# IORZ#HYHQO\#WKURXJKRXW#WKH#RUJDQL]DWLRQ>#VKH#WKRXJKW#WKDW#WKHUH#ZHUH#SHRSOH#ZLWKLQ# WKH# RUJDQL]DWLRQ# ZKR# ZHUH# ³VXUSULVHG# E\# HDFK# RWKHU1´# # 7R# 1HOVRQ/# WKDW# ZDV# XQDFFHSWDEOH1# # 7R# LQFUHDVH# WKH# FRPPXQLFDWLRQ# IORZ# EHWZHHQ# KHU# -9# SDUWQHU/# PDQDJHUV#DQG#GHSDUWPHQWV/#1HOVRQ#EHJDQ#D#ULWXDO#RI#GDLO\#PRUQLQJ#PHHWLQJV=## #
0\#-9#SDUWQHU#DQG#,/#DORQJ#ZLWK#WKH#HQWLUH#PDQDJHPHQW#WHDP/#DOO#VLW# DURXQG# WKH#FRQIHUHQFH# WDEOH#DW#;=33#D1P1#ZLWK# WKH# LQWHQW#RI#QHYHU# VXUSULVLQJ#RQH#DQRWKHU1##:H#WDON#DERXW#TXDOLW\#LVVXHV/#VDOHV#LVVXHV/# QHZ#RUGHUV#²#HVVHQWLDOO\#QRWKLQJ#LV#RII#OLPLWV#VR#WKDW#PDQXIDFWXULQJ# LV#QHYHU#VXUSULVHG#E\#ORJLVWLFV/#RU#ORJLVWLFV#LV#QHYHU#VXUSULVHG#DERXW# SXUFKDVLQJ/#DQG#VR#RQ1# #7RGD\¶V#PHHWLQJ#ZDV#DOO#RI#ILYH#PLQXWHV/# VRPH#PHHWLQJV#DUH#88#PLQXWHV#²#LW#GHSHQGV#RQ#WKH#LVVXHV1#
# 1LQH#PRQWKV#ODWHU/#WKH#PHHWLQJV#ZHUH#VWLOO#D#SDUW#RI#WKH#PRUQLQJ#ULWXDO#DW#$OSKD# 6KDQJKDL/#GHVSLWH#WKH#IDFW#WKDW#WKH\#ZHUH#RULJLQDOO\#LQWHQGHG#WR#EH#KHOG#IRU#WKUHH# ZHHNV/#XQWLO# WKLQJV#JRW#³EDFN#RQ# WUDFN1´# #+RZHYHU/#1HOVRQ# IRXQG# WKDW#HYHQ# LI# HYHU\RQH#DWWHQGHG#WKH#PHHWLQJV#MXVW#WR#VD\#JRRG#PRUQLQJ#WR#HDFK#RWKHU/#DQG#WKHQ# GLVSHUVHG/# WKH\#SUHIHUUHG# WKHP# WR#FRQWLQXH1# #1HOVRQ#IHOW# WKDW# WKH#PHHWLQJV#ZHUH# HIIHFWLYH#GXH#WR#WKHLU#DWWHQGDQFH=# #
(YHU\ERG\#VKRZV#XS#²#WKDW¶V#KRZ#,#NQRZ#LW¶V#ZRUNLQJ1#,I#SHRSOH# IHOW#LW#ZDV#D#ZDVWH#RI#WLPH/#RYHU#QLQH#PRQWKV#ZH#ZRXOG#KDYH#ORVW# SHRSOH1###%XW#HYHU\#VHDW#LV#WDNHQ#LQ#WKH#ERDUGURRP1##$QG#P\#SDUWQHU# FRPHV#HYHU\#GD\#EHFDXVH#LW#JLYHV#WKHP#D#IRUXP#WR#JHW#WKHLU#LVVXHV# RQ#WKH#WDEOH#DQG#WR#JHW#WKH#SXOVH#RI#WKH#RUJDQL]DWLRQ1#
# ,I#PDQDJHUV#KDG#LVVXHV#WKH\#GLG#QRW#IHHO#FRPIRUWDEOH#DGGUHVVLQJ#LQ#D#SXEOLF#IRUXP/# WKH\#ZHUH#IUHH#WR#PDNH#DQ#DSSRLQWPHQW#ZLWK#1HOVRQ1##³0\#VFKHGXOH#LV#IXOO#RI#RQH0 RQ0RQH¶V´#1HOVRQ#VWDWHG1##+RZHYHU/#VKH#IXUWKHU#H[SODLQHG#WKDW#WKHUH#ZDV#D#GLVWLQFW# UHOXFWDQFH#RQ#WKH#SDUW#RI#VRPH#RI#KHU#&KLQHVH#PDQDJHUV#WR#VHHN#KHU#FRXQVHO#DQG# LQFUHDVH#FRPPXQLFDWLRQ#ZLWK#KHU1# #7KXV/# LI#1HOVRQ# VDZ#RQH#RI#KHU#PDQDJHU¶V# VWUXJJOLQJ/# VKH#ZRXOG# LQVWUXFW# KHU# VHFUHWDU\# WR# PDNH# DQ# DSSRLQWPHQW#ZLWK# WKH# PDQDJHU#WR#PHHW#ZLWK#KHU1##%HORZ#WKH#PDQDJHU#OHYHO/#KRZHYHU/#SHRSOH#JRW#³UHDOO\# QHUYRXV/#ZKLFK#PHDQW#WKH#FRPPXQLFDWLRQ#ZDV#QRW#YDOLG#RU#HIIHFWLYH1##0RUHRYHU/# ODQJXDJH# LVVXHV#ZRXOG#FRPH# LQWR#SOD\/#JLYHQ# WKDW#HPSOR\HHV#EHORZ# WKH#PLGGOH# PDQDJHU#OHYHO#GLG#QRW#VSHDN#(QJOLVK1´### # *HQGHU# LVVXHV/#KRZHYHU/#ZHUH#QRW#FRQVLGHUHG#E\#1HOVRQ# WR#EH#D# IDFWRU# LQ#KHU# FRPPXQLFDWLRQ#DQG#UHODWLRQV#ZLWK#KHU#HPSOR\HHV1##,QGHHG/#DV#D#ZRPDQ#DW#RQH#RI# WKH#PRVW#VHQLRU#OHYHOV#LQ#$*6¶#PDQXIDFWXULQJ#HQYLURQPHQW#JOREDOO\/#1HOVRQ#IHOW# WKDW#VKH#IDFHG#PRUH#SUHVVLQJ# LVVXHV#DURXQG#KHU#EHLQJ#DQ#H[SDWULDWH# +H[SDW,# WKDQ# EHLQJ#D#IHPDOH1# #$FFRUGLQJ# WR#1HOVRQ/#KHU#HPSOR\HHV# WHQGHG# WR#YLHZ#KHU#³DV#D#
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#46# <$<<&347# # # :HVWHUQHU#ILUVW#²# ,#GRQ¶W# WKLQN# WKH\#IUDPH#PH#DV#D#IHPDOH1# #:KHQ#ZH#KDYH#D# SKLORVRSKLFDO#GLIIHUHQFH/#LW#KDV#QHYHU#EHHQ#EDVHG#RQ#D#JHQGHU#EDVLV#²#LW#KDV#EHHQ# EDVHG#RQ#DQ#H[SHULHQWLDO/#FXOWXUDO#EDVLV1´##7KRXJK#1HOVRQ#ZDV#WKH#RQO\#IHPDOH#LQ# XSSHU# PDQDJHPHQW/# WKHUH# ZHUH# WKUHH# RWKHU# PDQDJHUV# WUDQVIHUUHG# IURP# $*6¶# LQWHUQDWLRQDO#RSHUDWLRQV#ZLWK#ZKRP#1HOVRQ#ZRXOG#PHHW#GXULQJ#QRQ0ZRUN#KRXUV#RU# OXQFK1##'XULQJ#WKHVH#LQIRUPDO#VHVVLRQV/#YDULRXV#SURIHVVLRQDO#LVVXHV#DIIHFWLQJ#WKHLU# GHSDUWPHQWV/# $OSKD# 6KDQJKDL# DV# D# ZKROH/# RU# WKHLU# LQGLYLGXDO# LPSUHVVLRQV# DQG# FRSLQJ#VWUDWHJLHV#WR#DGMXVW#WR#OLIH#LQ#6KDQJKDL#ZHUH#GLVFXVVHG1### # $V# ZHOO# DV# IDFH0WR0IDFH# FRQWDFW/# H0PDLO# ZDV# DQRWKHU# SRSXODU# PHGLXP# RI# FRPPXQLFDWLRQ# ZKHQ# 1HOVRQ# ILUVW# DUULYHG# DW# $OSKD#6KDQJKDL/#ERWK# ZLWKLQ# WKH# RUJDQL]DWLRQ¶V#YDULRXV# LQWHUQDO#GHSDUWPHQWV#DV#ZHOO#DV#EHWZHHQ#$OSKD#6KDQJKDL# DQG# RWKHU# $*6# RIILFHV# DQG# PDQXIDFWXULQJ# IDFLOLWLHV# WKURXJKRXW# WKH# ZRUOG1## +RZHYHU/#1HOVRQ#IHOW#WKDW#WKH#H[WHQW#WR#ZKLFK#LW#ZDV#EHLQJ#XVHG#LQWHUQDOO\#DW#$OSKD# 6KDQJKDL#ZDV#GHWULPHQWDO#WR#SURGXFWLYLW\1##6KH#H[SODLQHG=# #
,# KDG# WR# LPSRVH# D# EDQ# RQ# H0PDLO# EHFDXVH# SHRSOH# ZHUH# VHQGLQJ# µGDUWV¶#WR#HDFK#RWKHU/#DYRLGLQJ# WKLQJV#WKDW#WKH\#ZHUHQ¶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²# WKDW¶V# WKH# PRVW# HIIHFWLYH# ZD\# RI# FRPPXQLFDWLQJ1#
# $FFRUGLQJ# WR# 1HOVRQ/# LW# ZDV# FRQVWDQW# IDFH0WR0IDFH# FRPPXQLFDWLRQ# WKDW# ZRXOG# JUHDWO\#DLG#LQ#$OSKD#6KDQJKDL¶V#DELOLW\#WR#XQGHUVWDQG#WKH#QHHGV#RI#WKHLU#-9#SDUWQHU1# +RZHYHU/# ZKHUHDV# LQWHUQDO# FRPPXQLFDWLRQ# ZDV# FRQVLGHUHG# E\# 1HOVRQ# WR# EH# HIILFLHQW#DW#WKH#6KDQJKDL#ORFDWLRQ/#LW#ZDV#OHVV#HIIHFWLYH#ZLWK#$*6¶#UHSUHVHQWDWLYH# +UHS,#RIILFH#LQ#%HLMLQJ1# # # &20081,&$7,21#:,7+#7+(#$*6#5(35(6(17$7,9(#2)),&(#,1#%(,-,1*# # 7KH#UHS#RIILFH#ZDV#WKH#LQLWLDO#FRQWDFW#ZLWK#DFFRXQWV1##7KH#UROH#RI#WKH#UHS#RIILFH#ZDV# WR#PDQDJH#VHFXUHG#DFFRXQWV#XQWLO#WKH#EXVLQHVV#ZDV#WUDQVIHUUHG#WR#D#PDQXIDFWXULQJ# VLWH16###$FFRUGLQJ#WR#1HOVRQ/#WKH#DWWLWXGH#LQ#WKH#UHS#RIILFH#ZDV#³DQ\#VDOH#LV#D#JRRG# VDOH1´##6KH#H[SODLQHG=#
########################################################### 6#$V#D#UHS#RIILFH/#WKH#%HLMLQJ#RIILFH#FRXOG#QRW#VLJQ#D#OHJDOO\#ELQGLQJ#FRQWUDFW#RU#VHW#D#XQLW#SULFH1##+RZHYHU/# WKH#GLVFXVVLRQV#EHWZHHQ#WKH#UHS#RIILFH#DQG#WKH#6DQ#<X2([FHO#-9#ZRXOG#IRUP#WKH#EDVLV#RI#D#FRQWUDFW/#DQG#LW# ZDV#SRVVLEOH#WR#DJUHH#RQ#SULQFLSOH#LQ#PDQ\#RI#WKH#WHUPV#WKDW#ZRXOG#IRUP#WKH#ELQGLQJ#FRQWUDFW1# #
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#47# <$<<&347# # #
7KH#UHS#RIILFH¶V# MRE# LV# WR#JHW# WKH#VDOHV#ILJXUHV#XS/#EXW# WKH\#KDYH# FRQIOLFWLQJ#LQWHUHVWV#ZLWK#RXU#RUJDQL]DWLRQ#²#WKH\#GR#QRW#KDYH#WR# FRQFHUQ# WKHPVHOYHV# ZLWK# DIWHU# VDOHV# VHUYLFH/# ZKHWKHU# RU# QRW# WKH# EXVLQHVV#LV#SURILWDEOH#RU#YLDEOH/#RU/#PRUH#LPSRUWDQWO\/#WKH#WHUPV#RI# WKH#FRQWUDFW1##7KHLU#PRWLYH#LV#VROHO\#WR#GULYH#VDOHV#XS1##
# $FFRUGLQJ# WR# 1HOVRQ/# 6DQ# <X¶V# PRWLYH# EHKLQG# WKH# VLJQLQJ# RI# WKH# OHWWHU# RI# DJUHHPHQW#ZLWK#$OSKD#6KDQJKDL#ZDV#GULYHQ#E\#WKH#IDFW#WKDW/#DW#WKDW#WLPH/#6DQ#<X# 0RSHG#ZRXOG#KDYH#EHHQ#IRUFHG#WR#GHOD\#SURGXFWLRQ#ZLWKRXW#WKH#JHDULQJ#V\VWHPV# SURYLGHG#E\#$OSKD#6KDQJKDL1# #³7KH\#QHHGHG#XV#PRUH# WKDQ#ZH#QHHGHG# WKHP/´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³WKH#HDV\#SDUW#ZDV#GRQH´#+DJUHHLQJ# WKDW#$OSKD#6KDQJKDL#ZRXOG#EH#D#VXSSOLHU#IRU#WKH#6DQ#<X2([FHO#-9,#EXW#WKH#KDUG# SDUW#²#DJUHHLQJ#RQ#D#SULFH#DQG#WHUPV#WR#JHW#WKH#EXVLQHVV#VWDUWHG#²#ZDV#OHIW#HQWLUHO\# WR#$OSKD#6KDQJKDL1´##1HOVRQ#DUJXHG#WKDW#DV#WKH#UHS#RIILFH#ZDV#QRW#WKH#ORQJ0WHUP# VWDNHKROGHU/# WKH\# VKRXOG# QHYHU# KDYH# OHIW# $OSKD# 6KDQJKDL# UHVSRQVLEOH# WR# VWDUW# GLVFXVVLRQV#RQ#FRQWHQWLRXV/#FRQWUDFWXDO#LVVXHV#IURP#VFUDWFK1##7KLV#ODFN#RI#FORVXUH# PHDQW# WKDW#QHJRWLDWLQJ#ZDV#D#FKDOOHQJH#IRU#1HOVRQ#DQG#KHU# WHDP#IURP# WKH#YHU\# EHJLQQLQJ1##7KLV#IULFWLRQ#EHWZHHQ#&KHQJ#;LH#DQG#1HOVRQ#KDG#FRPH#WR#DGYHUVHO\# DIIHFW# UHODWLRQV# DQG# FRPPXQLFDWLRQ# EHWZHHQ# WKH# WZR# RIILFHV1# %\# 6HSWHPEHU/# 1HOVRQ#VDLG=# #
(YHU\WKLQJ#ZDV#DQ#DUJXPHQW#ZLWK#&KHQJ#;LH#±#LW#ZDV#DV#WKRXJK#KH# ZRXOG#DUJXH#SXUHO\#IRU#WKH#VDNH#RI#LW1##,I#,#VDLG#ZH#VKRXOG#PHHW#DW# 45=33#IRU#OXQFK/#KH¶G#DUJXH#WKDW#ZH#VKRXOG#PHHW#DW#45=48#MXVW#WR#EH# GLIILFXOW1##%XW#ZKDW#UHDOO\#JRW#WR#PH#ZDV#WKH#IDFW#WKDW#KH#DFWHG#DV#LI#,# ZDV#LJQRUDQW#²#WR#WKH#SRLQW#ZKHUH#,#KDG#WR#VD\# WR#KLP=#µ/RRN/#,# PDQDJHG#DOO#WKH#1RUWK#$PHULFDQ#VDOHV#IRU#QRQ0$*6#FXVWRPHUV#WR# WKH#WXQH#RI#VHYHUDO#KXQGUHG#PLOOLRQ#GROODUV/#DQG#\RX¶UH#JRLQJ# WHOO# PH#KRZ#,#VKRXOG#QHJRWLDWH1¶### # 0RUHRYHU/#,#ZDV#YHU\#IUXVWUDWHG#ZLWK#KLP#EHFDXVH#ZKHQ#,#ZRXOG# JLYH#KLP#LQSXW/#DOO#KH#ZRXOG#VD\#WR#PH#ZDV#µ-XOLH/#WKLV#LV#&KLQD/#ZH# FDQ¶W#GR# LW# WKDW#ZD\#KHUH1¶# #%XW#ZKHQ#,#ZRXOG#DVN#KLP#ZKDW#ZH# VKRXOG#GR/#KH#ZRXOG#QRW#KDYH#DQ#DQVZHU1# #6R#,#ZRXOG#VD\=#µ2.1## :HOO#HLWKHU#\RX#JLYH#PH#RSWLRQV/#RU#,¶P#JRLQJ#WR#GR#ZKDW#,#NQRZ# KRZ#WR#GR#KHUH1# #7HDFK#PH/#RU#,#KDYH# WR#SURFHHG# WKH#RQO\#ZD\#,#
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#48# <$<<&347# # #
NQRZ#KRZ1¶##&KHQJ#;LH¶V#UHVSRQVH#ZDV#µMXVW#OHW#LW#EH#²#ZLWK#WLPH# WKLV# ZLOO# DOO# EH# UHVROYHG/¶# EXW# KLV# FRPSODFHQF\# ZDV# GULYLQJ# PH# FUD]\1##7KH#VLWXDWLRQ#ZDV#XQDFFHSWDEOH#WR#PH#DQG#,#ZDQWHG#FORVXUH1## ,#ZDQWHG#WR#NQRZ#ZKDW#ZH#ZHUH#JRLQJ#WR#GR#ZLWK#WKLV#EXVLQHVV#DQG# KRZ#ZH#ZHUH#JRLQJ#WR#PRYH#IRUZDUG1#
# 5HFHQWO\/#&KHQJ#;LH#KDG#FRQWDFWHG#1HOVRQ#DQG#VKDUHG#KLV#FRQFHUQV#WKDW#GHVSLWH#LWV# VWDQGLQJ#DV#RQH#RI# WKH# ODUJHVW#PRSHG#SURGXFHUV# LQ#&KLQD/#([FHO#&KLQD#ZRXOG# DFFRXQW#IRU#RQO\#D#YHU\#VPDOO#SRUWLRQ#RI#WKH#UHYHQXH#DW#WKH#VDOHV#RIILFH#IRU#WKDW#\HDU# ²#D#ILJXUH#ZKLFK#GLG#QRW#UHIOHFW#ZHOO#RQ#WKHLU#VDOHV#SURILOH1##:LWKRXW#D#FRQWUDFWXDO# DJUHHPHQW/#QR#LQFRPH#ZRXOG#EH#UHDOL]HG1##1HOVRQ#ZDV#DVWRQLVKHG1##6KH#KDG#ZULWWHQ# UHSRUWV#DQG#SRVLWLRQ#OHWWHUV#WR#&KHQJ#;LH#RQFH#D#PRQWK#DSSULVLQJ#KLP#IXOO\#RI#WKH# VWDWXV#RI#WKH#UHODWLRQVKLS#EHWZHHQ#$OSKD#6KDQJKDL#DQG#6DQ#<X/#\HW#KDG#QRW#KHDUG# DQ\# UHVSRQVH1# # 0RUHRYHU/# &KHQJ# ;LH¶V# SUHVHQFH# DW# WKH# PRQWKO\# PDQDJHPHQW# PHHWLQJV#HQVXUHG#WKDW#KH#ZDV#DZDUH#RI#WKH#VLWXDWLRQ#ZLWK#6DQ#<X#DV#LW#XQIROGHG1## # 7KXV/#LQ#UHVSRQVH#WR#&KHQJ#;LH¶V#FRQFHUQV/#1HOVRQ#LQGLFDWHG#WKDW#LW#ZDV#WRR#ODWH1## ,Q#RUGHU#IRU#KHU#WR#KDYH#HQWHUWDLQHG#WKRXJKWV#RI#LQFOXGLQJ#&KHQJ#;LH¶V#LQSXW#LQ#WKH# QHJRWLDWLQJ#SURFHVV/#VKH#ZRXOG#KDYH#KDG# WR#KDYH#KHDUG#IURP#KLP#PRQWKV#SULRU/# ZKHQ#VKH#ZDV#VWUXJJOLQJ#WR#GHDO#ZLWK#ZKDW#1HOVRQ#FRQVLGHUHG#WR#EH#&KHQJ#;LH¶V# RYHUH[WHQGHG#SURPLVHV#DQG# ODFN#RI#FORVXUH# WKDW#KDG#PDGH#QHJRWLDWLRQV#GLIILFXOW# IURP#WKH#YHU\#EHJLQQLQJ1##*LYHQ#&KHQJ#;LH¶V#ODFN#RI#FRPPXQLFDWLRQ/#1HOVRQ#ZDV# QRW#ZLOOLQJ#WR#HQWHUWDLQ#DQ\#RI#KLV#UHTXHVWV#³XQWLO#KH#UHVSRQGHG#WR#HYHU\#OHWWHU#WKDW# ZDV#ZULWWHQ# WR#KLP1´# #&RQVHTXHQWO\/#&KHQJ#;LH# WRRN#KLV#FRQFHUQV# WR#1HOVRQ¶V# VXSHULRU/#$ODQ#*UHHQ#$*6¶#FRXQWU\#PDQDJHU#IRU#&KLQD/#ZKR#ZDV#QRW#SUHSDUHG#WR# LQWHUYHQH/#WUXVWLQJ#WKDW#1HOVRQ#KDQGOHG#WKH#VLWXDWLRQ#DSSURSULDWHO\1##### # # 7+(#7851,1*#32,17## # # :LWK#WKH#H[SLUDWLRQ#RI#WKH#VL[0PRQWK#FRQWUDFW/#D#WKUHH0PRQWK#FRQWUDFW#ZDV#VLJQHG/# EXW/#DFFRUGLQJ# WR#1HOVRQ/# WKHUH#ZDV#VWLOO#³KHDUW\#GLVDJUHHPHQW´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³ORVW# LW1´# # ,W#KDG#EHHQ#DOPRVW#QLQH#PRQWKV#VLQFH# WKH#FRPPHQFHPHQW#RI# QHJRWLDWLRQV#DQG#1HOVRQ# IHOW#VWURQJO\# WKDW# LW#ZDV# WLPH# WR#QHJRWLDWH#D# ORQJ0WHUP# FRQWUDFW#RU# WR#VHYHU# WKH#UHODWLRQVKLS1#0HDQZKLOH/#6DQ#<X¶V#RUGHU#YROXPHV#ZHUH# GURSSLQJ#SUHFLSLWRXVO\#DV# WKHLU#SURGXFWLRQ# IDOWHUHG/#DFFRXQWDEOH# WR#ZKDW#1HOVRQ# DVVXPHG#ZDV#LQWHUQDO#VWULIH#DW#WKH#6DQ#<X0([FHO#-91##7KXV/#WKH#JDS#EHWZHHQ#WKH# XQLWV#6DQ#<X#KDG#RULJLQDOO\#IRUHFDVW#LQ#WKHLU#OHWWHU#RI#LQWHQW#DQG#WKH#QXPEHU#RI#XQLWV#
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#49# <$<<&347# # # WKH\#ZHUH#DFWXDOO\#FRQVXPLQJ#ZDV#H[SDQGLQJ#UDSLGO\/#DQG#WKH#SURVSHFW#RI#$OSKD# 6KDQJKDL# UHFRXSLQJ# WKHLU# LPPHQVH# LQYHVWPHQW# LQ# 6DQ# <X# ZDV# EHFRPLQJ# LQFUHDVLQJO\#GLVWDQW1#### # ,QFUHDVLQJ#1HOVRQ¶V#VHQVH#RI#XQHDVH#ZLWK#6DQ#<X#ZDV#KHU#VWURQJ#VXVSLFLRQ#WKDW#6DQ# <X¶V# UDWLRQDOH# EHKLQG# D# VHULHV# RI# WKUHH0PRQWK# FRQWUDFWV# ZDV# WR# JLYH# $OSKD# 6KDQJKDL¶V#FRPSHWLWLRQ# +WKH# ORFDO#FRPSDQ\# WKDW#1HOVRQ#VXVSHFWHG#RI#EHLQJ#6DQ# <X¶V#RULJLQDO/#IDYRUHG#SDUWQHU,#D#FKDQFH#WR#WRRO#XS#IRU#SURGXFWLRQ1##1RQHWKHOHVV/# $OSKD#6KDQJKDL#FRQWLQXHG#WR#EH#ZKDW#1HOVRQ#WHUPHG#³KXPDQLWDULDQ´#DQG#WR#VKLS# SDUWV/#EHFDXVH#6DQ#<X#UHTXLUHG#WKH#SDUWV#IRU#SURGXFWLRQ#DQG/#LQ#1HOVRQ¶V#RSLQLRQ/# WKH#-9#ZRXOG#PRVW#FHUWDLQO\#IDOWHU#ZLWK#D#ODSVH#LQ#SURGXFWLRQ1## # $PSOLI\LQJ# WKH#GLIILFXOWLHV# LQ# WKH#UHODWLRQVKLS#EHWZHHQ#$OSKD#6KDQJKDL#DQG#6DQ# <X#ZDV#WKH#IDFW#WKDW#6DQ#<X#KDG#QRW#\HW#SDLG#DQ\WKLQJ#WR#$OSKD#6KDQJKDL1##7KLV# VLWXDWLRQ#PDGH#1HOVRQ#YHU\#XQFRPIRUWDEOH#VXSSO\LQJ#PRUH#SDUWV#ZLWKRXW#SD\PHQW# IRU#SDVW#VKLSPHQWV#RYHU# WKH#FRXUVH#RI#VHYHUDO#PRQWKV#DPRXQWLQJ# WR#PLOOLRQV#RI# 50%/#GHVSLWH#FRQVWDQW#UHDVVXUDQFHV#IURP#KHU#-9#SDUWQHU#DQG#&KHQJ#;LH#WKDW#³WKLV# LV# WKH# ZD\# WKLQJV# DUH# GRQH# LQ# &KLQD1´# # 1RQHWKHOHVV/# 1HOVRQ# ZDV# YHU\# XQFRPIRUWDEOH#GRLQJ#EXVLQHVV#WKLV#ZD\#²#HVSHFLDOO\#LQ#OLJKW#RI#KHU#VXVSLFLRQ#WKDW# 6DQ#<X#ZDV#VHHNLQJ#DQRWKHU#PDLQ#JHDULQJ# V\VWHP# VXSSOLHU1# #7KXV/# VKH# WRRN#D# GUDVWLF#PHDVXUH#LQ#WKH#FRQWH[W#RI#GRLQJ#EXVLQHVV#LQ#&KLQD#²#VKH#WROG#6DQ#<X#WKDW# QR#IXUWKHU#SDUWV#ZRXOG#EH#VKLSSHG#WR#6DQ#<X#EHIRUH#SD\PHQW/#NQRZLQJ#WKDW#WKH\# UHTXLUHG#WKH#SDUWV#IRU#SURGXFWLRQ1##1HOVRQ#ZDV#DZDUH#RI#WKH#GDPDJLQJ#HIIHFW#WKLV# ZRXOG#KDYH#RQ# WKHLU#UHODWLRQVKLS>#VKH#NQHZ# WKDW# LW#ZRXOG#JUHDWO\#DQJHU#6DQ#<X# EHFDXVH/#DFFRUGLQJ#WR#1HOVRQ=## #
7R# GHPDQG# PRQH\# ZDV# YHU\# UXGH/# DQG#PRVW# LQDSSURSULDWH# LQ# D# &KLQHVH#EXVLQHVV#FXOWXUH1#,W#JRHV#EDFN#WR#WKH#RULJLQDO#EDVLV#IRU#WKH# UHODWLRQVKLS#²#WUXVW#²#DQG#EUHDNV#WKDW#WUXVW1##'HPDQGLQJ#SD\PHQW# ZDV#HTXLYDOHQW#WR#QRW#KDYLQJ#IDLWK#LQ#WKH#UHODWLRQVKLS1##
# 1RQHWKHOHVV/#1HOVRQ¶V#UDWLRQDOH#ZDV#WKDW#LW#ZDV#MXVW#D#PDWWHU#RI#WLPH#EHIRUH#$OSKD# 6KDQJKDL#ZDV#WHUPLQDWHG#DV#OHDG#VXSSOLHU#E\#6DQ#<X/#DQG#VKH#IHOW#WKDW#LI#VKH#GLG# QRW#UHFRXS#DW#OHDVW#D#SRUWLRQ#RI#WKHLU#DFFRXQWV#SD\DEOH#ZKLOH#WKH\#KDG# OHYHUDJH/# WKH\#ZRXOG#QHYHU#UHFHLYH#SD\PHQW1# #1HOVRQ#H[SODLQHG#KHU#XQGHUVWDQGLQJ#RI# WKH# VLWXDWLRQ#WR#KHU#-9#SDUWQHU#DQG#QHJRWLDWLQJ#WHDP=# #
*X\V/#ZH¶UH#HLWKHU#JRLQJ#WR#JHW#D#ORQJ0WHUP#FRQWUDFW#RU#QRW/#DQG#WKLV# LV#QRW#JRLQJ#WR#EH#WKH#EUHDNLQJ#SRLQW1##6R#,#FDQ#DQJHU#WKHP#PRUH/# DQG# DVN# IRU#PRQH\/# RU#QRW# DQJHU# WKHP# DQG#QRW# JHW# DQ\# PRQH\# SRWHQWLDOO\1# #%XW/# LI# ,#GRQ¶W#DVN# IRU#PRQH\/# ,#EHOLHYH# WKDW#$OSKD# 6KDQJKDL#LV#JRLQJ#WR#EH#WKH#ELJ#ORVHU1##,#NQRZ#WKLV#VHQGV#WKH#VLJQDO# WKDW#ZH¶UH#QRW#JRLQJ#WR#DFW#OLNH#D#&KLQHVH#FRPSDQ\/#ZH¶UH#JRLQJ#WR# DFW#OLNH#D#:HVWHUQ#FRPSDQ\/#EHFDXVH#,¶P#VD\LQJ#XQWLO#\RX#JLYH#PH# PRQH\/#,¶P#QRW#VKLSSLQJ#SDUWV1#
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#4:# <$<<&347# # # 1HOVRQ#SRVLWLRQHG#KHUVHOI#DV#³WKH#ELJ/#EDG#$PHULFDQ´#DQG#DVNHG#KHU#QHJRWLDWLQJ# WHDP# WR#FRQVLVWHQWO\# UHLQIRUFH# WKDW# WKH#GLUHFWLRQ#ZDV#FRPLQJ# IURP#KHU/#QRW#KHU# SDUWQHU1###7KH\#ZHUH#WROG#WR#VD\/#³,#ZRUN#IRU#WKLV#VLOO\#$PHULFDQ/#DQG#VKH#ZRQ¶W#OHW# XV# VKLS#SDUWV1´# #$FFRUGLQJ# WR#1HOVRQ/# WKLV# WDFWLF#ZRUNHG#²#HYHU\# WLPH#$OSKD# 6KDQJKDL# VWRSSHG# VKLSSLQJ/#6DQ#<X# VHQW# WKHP#RQH#PLOOLRQ#50%1#1HOVRQ#ZDV# DZDUH#WKDW#WKH\#ZHUH#WKH#RQO\#VXSSOLHU#WR#UHFHLYH#SD\PHQW>#WKURXJKRXW#FRQVHTXHQW# GLVFXVVLRQV#ZLWK#1HOVRQ/#6DQ#<X#UHSUHVHQWDWLYHV#ZRXOG#FRQVLVWHQWO\#EULQJ#WR#KHU# DWWHQWLRQ#WKDW#IDFW#VD\LQJ/#³<RX#UHDOL]H/#\RX¶UH#WKH#RQO\#FRPSDQ\#ZKR#KDV#JRWWHQ# SDLG1´##1HOVRQ#ZRXOG#UHVSRQG/#³:H#WKDQN#\RX#IRU#WKDW/#EXW#VWLOO/#\RX#RZH#PH#PRUH# PRQH\/#DQG#\RX¶UH#QRW#JHWWLQJ#PRUH#SDUWV#XQWLO#\RX#SD\#PH#IRU#WKH#QH[W#VKLSPHQW1´# # 7KLV#ZDV#WKH#WLPH#LQ#WKH#QHJRWLDWLRQV#WKDW#1HOVRQ#GLUHFWHG#KHU#QHJRWLDWLQJ#WHDP#WR# VHQG#WKH#PHVVDJH#WR#6DQ#<X#WKDW#³HLWKHU#ZH#JHW#D#FRQWUDFW/#RU#ZH¶UH#JRLQJ#WR#JHW# RXW#RI#WKH#EXVLQHVV1´##7KXV/#ZKHQ#6DQ#<X#FDPH#WR#$OSKD#6KDQJKDL#LQ#PLG0$XJXVW/# 1HOVRQ# LQVWUXFWHG# VLJQV# WR# EH# SODFHG# RQ# YDULRXV# 6DQ# <X0GHGLFDWHG# HTXLSPHQW# VD\LQJ#µ0RYH#WR#$QRWKHU#3DUW#RI#WKH#3ODQW¶#DV#LI#WKH#RSHUDWLRQ#ZHUH#MXVW#ZDLWLQJ#IRU# WKH#ZRUG#IURP#1HOVRQ#WR#EH#GLVPDQWOHG1##1HOVRQ#ZDQWHG#6DQ#<X#WR#VHH#SK\VLFDO# VLJQV#WKDW#$OSKD#6KDQJKDL#ZHUH#QRW#SUHSDUHG#WR#FRQWLQXH#DV#WKH\#KDG#IRU#WKH#SDVW# \HDU1### # # 21*2,1*#7(16,216# # $OSKD#6KDQJKDL#FRQWLQXHG#WR#FRPPXQLFDWH#ZLWK#6DQ#<X#WKURXJK#PRQWKO\#OHWWHUV/# ZKLFK# LQIRUPHG# 6DQ# <X# RI# WKH# VWDWXV# RI# WKHLU# SURGXFWLRQ# IDFLOLWLHV# DW# $OSKD# 6KDQJKDL1##/DVW#PRQWK¶V#OHWWHU#WR#6DQ#<X#LQGLFDWHG#WKDW#$OSKD#6KDQJKDL#ZDV#QR# ORQJHU#PDWHULDO#FDSDEOH/#DQG#1HOVRQ#ZDV#LQ#WKH#SURFHVV#RI#GUDIWLQJ#DQRWKHU#OHWWHU# DOHUWLQJ#6DQ#<X#RI#WKH#IDFW#WKDW#WKH\#ZHUH#QR#ORQJHU#SURGXFWLRQ0FDSDEOH#²#WKDW# $OSKD# 6KDQJKDL# KDG# EHJXQ# GLVDVVHPEOLQJ# WKHLU# SURGXFWLRQ# OLQHV1# # 1HOVRQ# KDG# DQWLFLSDWHG#WKH#GDQJHUV#RI#QRW#FRPPXQLFDWLQJ#ZLWK#6DQ#<X#UHJDUGLQJ#WKH#VWDWXV#RI# WKHLU#RSHUDWLRQV#DQG/#WKXV/#VRXJKW#WR#DYRLG#WKH#SURVSHFW#RI#6DQ#<X#VD\LQJ/#DW#DQ\# SRLQW/#WKDW#WKH\#ZHUH#QRW#DZDUH#RI#$OSKD#6KDQJKDL¶V#PRYHV1##1HOVRQ#ZDV#JXDUGLQJ# WKH#SURVSHFW#RI#6DQ#<X#VWDWLQJ#WKDW#³LI#RQO\#WKH\#KDG#EHHQ#LQIRUPHG/#WKH\#ZRXOG# KDYH# WDNHQ# DFWLRQ# WR# VWRS# WKH# LQFUHPHQWDO# GLVPDQWOLQJ# RI# RSHUDWLRQV´# DQG# VKH# WKRXJKW# WKH# ZULWWHQ# FRPPXQLFDWLRQ# FRYHUHG# KHU# WR# WKDW# HQG1# # ([FHO¶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¶V# LQWHUQDO#DQG#H[WHUQDO# FRPPXQLFDWLRQ# VWUDWHJ\# WR#KHOS# DYRLG# WKLV# W\SH#RI# VLWXDWLRQ#ZLWK# IXWXUH#PDMRU# FOLHQWV1# # 7KH#5LFKDUG#,YH\#6FKRRO#RI#%XVLQHVV#JUDWHIXOO\#DFNQRZOHGJHV#WKH#JHQHURXV#VXSSRUW# RI#7KH#5LFKDUG#DQG#-HDQ#,YH\#)XQG#LQ#WKH#GHYHORSPHQW#RI#WKLV#FDVH#DV#SDUW#RI#WKH# 5,&+$5'#$1'#-($1#,9(<#)81'#$6,$1#&$6(#6(5,(61#
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.
3DJH#4;# # <$<<&347# # #
([KLELW#4# 25*$1,=$7,21$/#6758&785(##
$/3+$#6+$1*+$,#
#
6DQ#<X#$FFRXQW#7HDP +6#.DL#0DFKLQH#6DOHVSHRSOH,
6DOHV#0DQDJHU /LX#7LDQPLQ
'HSXW\#*HQHUDO#0DQDJHU )#'LUHFWRU#RI#6DOHV <DQJ#;LDRELQ
)LQDQFH#0DQDJHU )HQJ#=DLODQJ
,QIRUPDWLRQ#6\VWHPV#0DQDJHU &XL#'DKDL
3XUFKDVLQJ#0DQDJHU &KHQ#=KHQ
3HUVRQQHO#0DQDJHU /L#-LFKXQ
0DWHULDOV#'LUHFWRU :DQJ#<LQJ
0DQXIDFWXULQJ 6XSHUYLVRUV
0DQXIDFWXULQJ#0DQDJHU :X#&KDRPLQJ
/RJLVWLFV#0DQDJHU ;LH#<LQJ
2SHUDWLRQV#'LUHFWRU &KXFN#%URZQ
3URGXFW#(QJLQHHULQJ 6XSHUYLVRUV
3URGXFW#(QJLQHHULQJ#0DQJHU 6WXDUW#%HOO\RX
4XDOLW\#&RQWURO#0DQDJHU 6XQ#7DLURQJ
(QJLQHHULQJ#'LUHFWRU )UDQN#5REHUWV
*HQHUDO#0DQDJHU -XOLH#1HOVRQ
&RXQWU\#0DQDJHU $ODQ#*UHHQ
%HLMLQJ#5HSUHVHQWDWLYH 2IILFH#0DQDJHU &KHQJ#;LH
For the exclusive use of Y. Zhu, 2017.
This document is authorized for use only by Yongyu Zhu in Doing Business in China Sp2017 taught by Lihua Wang, San Francisco State University from January 2017 to May 2017.