CHINA NEEDS DELICATE HANDLING

As a result, Mr Blumenberg now enjoys a playful relationship with the security officers. "I always salute back," says the 61-year-old German, who is president of a large joint venture in Nanjing between Germany's BASF, the world's biggest chemicals group, and Sinopec, a Chinese petrochemicals business.

The tale illustrates some of the thought processes that influence managers of joint ventures between foreign businesses and Chinese groups. Most of the world's biggest industrial groups have been attracted to a country that, even as growth slows, they regard as a beacon of hope. But in many sectors, Beijing insists that foreign companies work with a state-owned business, partly to ensure technology and management ideas are transferred to Chinese companies, but also to protect the latter from the fiercest competition.

So some deftness in deciding when to make compromises is often vital to managing overseas companies' operations in China, as well as using experiences with the joint venture to build strength in a country that presents many difficulties for foreign entrants.

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