China’s Citic Securities Co. and France’s Credit Agricole SA have decided to take it slow in their relationship.

More than a year of talks to create a global partnership has resulted in a scaled-down deal whereby the Chinese bank takes minority stakes in the Asian and European brokerage arms of Credit Agricole for a combined $374 million.

Maybe the complexity of today’s financial institutions and the tougher regulatory environment make the prospect of creating any joint venture look daunting.

Jonathan Slone, chief executive officer of CLSA, Credit Agricole’s Asian brokerage arm, certainly thinks so after making the attempt.

“It was just a nightmare. When we got into the detail of having a JV versus a direct investor, we decided this is just so much easier,” said Mr. Slone.

Other banks around Asia have had problems with joint ventures. Morgan Stanley and Mitsubishi UFJ Financial Group Inc. scaled back an ambitious joint-venture project in Japan late 2009 partly to appease the concerns of regulators.

Mr. Slone points out that complexity is multiplied when the proposed joint venture stretches across several legal jurisdictions.

But who loses out when the deal is scaled back?

Continue reading on Exchange

China’s economy during the past 30 years has changed from a centrally planned system that was largely closed to international trade to a more market-oriented economy that has a rapidly growing private sector and is a major player in the global economy.

The Chinese government seeks to add energy production capacity from sources other than coal and oil, and is focusing on nuclear and other alternative energy development.

The People’s Republic of China is the world’s second largest economy after the United States by both nominal GDP ($5 trillion in 2009) and by purchasing power parity ($8.77 trillion in 2009).

Nevertheless, key bottlenecks continue to constrain growth.

The country is one of the world’s largest producers of a number of industrial and mineral products, including cotton cloth, tungsten, and antimony, and is an important producer of cotton yarn, coal, crude oil, and a number of other products.

China has acquired some highly sophisticated production facilities through trade and also has built a number of advanced engineering plants capable of manufacturing an increasing range of sophisticated equipment, including nuclear weapons and satellites, but most of its industrial output still comes from relatively ill-equipped factories.

The market-oriented reforms China has implemented over the past two decades have unleashed individual initiative and entrepreneurship, whilst retaining state domination of the economy.

Both forums will start on Tuesday.

In 2009, global ODI volume reached $1.1 trillion, and China contributed about 5.1 percent of the total.

China is aiming to be the world’s largest new energy vehicle market by 2020 with 5 million cars.

China’s challenge in the early 21st century will be to balance its highly centralized political system with an increasingly decentralized economic system.

Even with these improvements, agriculture accounts for only 20% of the nation’s gross national product.

China is the world’s largest producer of rice and wheat and a major producer of sweet potatoes, sorghum, millet, barley, peanuts, corn, soybeans, and potatoes.

Hogs and poultry are widely raised in China, furnishing important export staples, such as hog bristles and egg products.

Growing domestic demand beginning in the mid-1990s, however, has forced the nation to import increasing quantities of petroleum.

There are also deposits of vanadium, magnetite, copper, fluorite, nickel, asbestos, phosphate rock, pyrite, and sulfur.

In the 1990s a program of share-holding and greater market orientation went into effect; however, state enterprises continue to dominate many key industries in China’s socialist market economy.

The iron and steel industry is organized around several major centers (including Anshan, one of the world’s largest), but thousands of small iron and steel plants have also been established throughout the country.

Originally posted here:
Credit Agricole, Citic Take It Slow