Joint Venture in China
One of the biggest issues may be found through the difference in law between China and Australia; China having civil law and Australia having common law. Therefore in order to have the Joint-Venture contract protected from future changes in the Chinese civil law system a stabilisation clause is highly recommended (Coale, M. T. B, 2001-2002). Types of Joint-Ventures in China: What makes the selection of a joint-venture so important is that even though China’s Choice of Law provisions follow international practices; this doesn’t apply for Joint-Ventures.
The only time a foreign party within a Joint-Venture may have a choice of law is when settling disputes Types of Sino-Foreign Joint-Ventures in China: Refer to Appendix In this type of Joint-Venture both parties contribute to the registered capital and risks; profits and losses are all taken in regards to the proportion of that contribution.