Case | HBS Case Collection | November 2008

The Hong Kong & China Gas Company Ltd.: Negotiating Joint Ventures in China

by James K. Sebenius, Michael Shih-ta Chen and Medha Samant

Abstract

To deliver 5-6 major new Chinese joint ventures annually, Hong Kong China Gas executives began extracting cross-border negotiating lessons from their 80 existing Chinese JVs. Chairman Alfred Chan and CEO Peter Wong knew that HKGC's growth strategy required significant mainland expansion through negotiating joint ventures to run gas and water distribution systems in diverse urban and rural locations throughout mainland China-often in the face of entrenched local interests who could have blocking power. Discussions with HKGC's negotiation teams revealed an increasingly sophisticated negotiating approach from target identification and party mapping, to "social mapping" and building guanxi, to creative deal design and tactics, in order to most effectively work out issues of equity, management control, territory, and exclusivity.

Keywords: Joint Ventures; Cross-Cultural and Cross-Border Issues; Negotiation Tactics; Interests; Cooperation; Expansion; Utilities Industry; Hong Kong;

Citation:

Sebenius, James K., Michael Shih-ta Chen, and Medha Samant. "The Hong Kong & China Gas Company Ltd.: Negotiating Joint Ventures in China." Harvard Business School Case 909-028, November 2008.