This is a joint venture based on contract. The liabilities ,rights and obligations of the contract agreed upon by the parties concerned. The general way of managing a contractual joint venture is that the Chinese partner contributes the right to use the land, labour force and labour services or readily accessible spaces, equipment and materials. On the basis of equality and mutual benefit, the parties to the joint venture shall decide through negotiation the appropriate form of administration and profit distribution and profit proportion. The major difference between an equity joint venture and a contractual joint venture is that the latter neither necessarily calculates the shares in the form of currency nor distributes profit in proportion to their share, but share profit according to the form of investment and the ration of profit sharing as per the contract.