I've read many posts about the possibility of CRRC doing backroom deals with VZ or otherwise "screwing" KRY
In my opinion, this is highly unlikely.
My understanding of Chinese business relationships is not from experience, but I have done a fair bit of research on the subject and following is my understanding of the subject.
Chinese business relationships are primarily geared to forming long-term and mutually beneficial relationships and not for short-term profit. This reflects the concepts of Confucianism and Guanxi (http://en.wikipedia.org/wiki/Guanxi) that permeate Chinese business culture. Guanxi translated in Western terms is "scratch my back and I'll scratch yours" The Confucianism aspect is the idea of mutually beneficial relationships.
Business relationships are not entered into lightly, but evaluated on long-term mutual benefit. Reputation is important in Chinese business culture because of this long-term outlook and the idea of Guanxi requires trust between business partners. It's a long process, and we (KRY) witnessed this with the negotiation of the JV deal with CRRC...
Why is this important to us and KRY?
CRRC is unlikely to "screw" KRY and earn a reputation of being untrustworthy. This would have catastrophic impact on all future business dealing. I'll remind you that CRRC is a huge company and has bigger projects than LC now and in the future
It's more likely that CRRC will try and negotiate a deal between VZ, KRY and itself that is mutually beneficial to all.
The Chinese are excellent negotiators, very few business conflicts go to court in China and most are resolved through negotiation between the parties involved.
In my opinion, CRRC will work out some deal that is acceptable to KRY, VZ and CRRC.
NZranger
