Russian-Chinese Joint Venture Feasibility In Construction Machinery Field

This work provides an information and survey about the essence and structure of international joint ventures,motives and modern tendencies of making international ventures.The first chapter covers the research outline,background,goals and objectives of thesis.The second chapter explains methods,which author used in his work.The third chapter includes theoretical part about international joint ventures: its essence and definition,main characteristics and tendencies,as well as motives for international joint venture foundation,based on two theories and the classification of international cooperation associations.In the fourth chapter a case study of the manufacturing joint venture provided.In the fifth chapter of the thesis the study of feasibility of creating an international joint venture between Russia and China in Russian Far Eastern region in construction machinery field,its leasing,“cold rental” and secondary resell after a period of time is provided.In order to retrieve the insider information,including the current prices for heavy construction machinery,two personal interviews with CEOs of successful construction companies and one private chat with International Joint Venture representative are taken.In this work author used such methods as case study,feasibility analysis,and SWOT analysis of the case,based on calculations and personal questionnaires.The results,provided in the last chapter,have shown that it is feasible to create a joint venture in two ways:Establishment of an international joint venture on the terms of the Free Port of Vladivostok,focusing on the provision of services to large companies and participation in large,possibly state,construction projects.Under these conditions,it is advisable to create such an international joint venture and to allocate funds for the arrangement of the Free Customs Zone on the construction site.Creation of an international joint venture without participation in the Free Port of Vladivostok.In this case,it is advisable to create a joint venture between representatives of local construction companies and Chinese manufacturers of large construction machinery.The manufacturing company provides the equipment to the joint venture at a lower price to legally reduce the price of paid import duties on the territory of the Russian Federation.After receiving or acquiring the machinery,the management staff of the joint venture begins to resell,lease or “cold rental” of large construction equipment to any local construction organization for any construction purpose of any scale.After the warranty period and the aging of construction equipment,it will be advisable to resell it at the price of used equipment.According to experts in the field of construction,the demand for used construction machinery in the Russian Far East is extremely high.Local companies do not have the funds to purchase new equipment,but are willing to pay for rent and subsequent redemption.Such a business model will cover the demand among local construction organizations and bring significant profit to the joint venture and the manufacturing company.