Due to well-publicized cases of disputes between Chinese and foreign partners, joint ventures have fallen out of favor in recent years.

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In the late 1990s provincial leaders decided to quietly form an auto company in Wuhu, even though the Chinese government had issued restrictions that limited automaking to a handful of joint ventures between foreign automakers and state-owned Chinese partners.

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Foreign and Chinese firms that wanted to enter joint ventures had no way of gauging the counterparty risk of potential partners.

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As a category, alternative investments ranging from direct investments by foreign corporations in Chinese joint ventures and wholly owned facilities, to investments by private equity firms in all sectors of the economy will continue to be the best way to invest large amounts of capital in China.

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Next come the joint ventures between private (often foreign) companies and Chinese state-backed entities.

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Under the new agreement, Chinese companies will own at least 51% of the joint ventures, and the foreign joint venture partners will need to provide key areas of technology to even have minority ownership.

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But they also said that China is catching up fast in other areas of civil and military aviation technology, thanks in large part to technology transferred by foreign aerospace companies in Chinese joint ventures.

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