BUSINESSES should be wary of mainland companies and get promises in writing before committing to joint ventures, said a major accounting firm.
Deloitte Touche Tohmatsu general manager in Shanghai Kenny Poon said: ''Some Hong Kong clients of mine have set up a vague joint venture with a Chinese company.
''They later found their partners didn't even own the factory and staff quarters they were shown and promised.'' He said many companies rushed into China to set up operations without first discussing specifics.
His clients in joint venture had invested about $2 million. Chinese officials were investigating, Mr Poon said.
Growing business interests in China meant having to learn about Chinese financial procedures and policies, said Connie Sit of Radica, a Hong Kong electronics company.
''It is an entirely different system than the one we're used to,'' said Ms Sit whose company will start a joint venture in Dongguan, in southern China.
That task became harder when China changed its accounting regulations for foreign investment in 1992.