Since China was open to the outside world , its trade forms have become much more flexible . One of these commonly used forms is co-production . Would you please do a bit explanation of it , Mr . Walker ?   Well , under this arrangement two parties cooperate to manufacture a product or a category of products , for example , machine tools for export . Each party produces and supplies a part of the components and parts ; one party is a Chinese enterprise , the other , an overseas firm . Most probably , the foreign counterpart contributes technology and equipment , and sometimes , parts and components , while the Chinese enterprises factory building , labor and other resources to the cooperative production . They join hands and fulfill orders together by an agreement or a contract .   I suppose that the assembling of these components and parts , particularly the marketing of the finished products should take place in China .   Not necessarily . It depends on the contract stipulations . They may be marketed in the foreign country where the other party is located , or even in a third country . 