The battle between China's beverage leader Wahaha and its multinational partner Danone could enter the judicial stage, since Danone announced it would take legal action against Wahaha on Wednesday.

The French food giant accused the Hangzhou Wahaha Group of violating a joint venture contract by illegally using the Wahaha brand name. Wahaha accused Danone of coercing the company to accept its terms, which go against Wahaha's interest.

So far, the dispute has been entangled in technical details and both parties seem unwilling to compromise.

Admittedly, it is sad to see the once successful partnership encounter difficulties. Danone and Wahaha have benefited greatly from their joint venture to sell water, yogurt and tea drinks.

Their current row shows that the road of economic cooperation may sometimes be bumpy. As China's economic situation changes, so do the bids of parties involved in Sino-foreign ventures.

In a sense, such a dispute is normal in the business world. The time-consuming and costly legal procedures should be the last resort, and their best bet would be to negotiate an out-of-court deal.

Danone has allegedly turned to domestic political forces to get its way. Wahaha, on the other hand, has been playing the cards of national economic security and protection of Chinese brands.

From the business perspective, both in this case have failed to behave properly, if the allegation against Danone proves true.

Political influence should be separate from such regular business disputes; they should let politics be politics and business be business.

China has welcomed outside investors since it opened its economy 30 years ago, and its stance has remained unchanged.

Meanwhile, it is consistently improving its legal environment to better settle business disputes arising from economic cooperation.

It is prepared to protect the right side, regardless of where it is based.

(China Daily 05/11/2007 page10)

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