Aremarkable Sino-US commercial dispute recently spread to a quiet corner of eastern China. But Cooper Tire’s retreat from a joint venture in Shandong province drew almost no international attention — despite being one of the most interesting corporate case studies of the first two years of Chinese president Xi Jinping’s administration.
Cooper’s 18-month battle with Chengshan Group, its state-owned joint venture partner, has illustrated the potential problems that can arise at the intersection of politics and multinational investment in the world’s second-largest economy. Any international executive who does not study the Ohio tyremaker’s nightmare could end up reliving it.
Most significantly, the US company’s travails in Shandong show what is at stake for overseas investors in the latest Chinese legal reforms.