After struggling to go it alone in China and with profits down in Europe, Tesco, the UK’s leading food retailer, has fallen back on the tried-and-tested method for western businesses operating in China: a joint venture.

Tesco plans to deconsolidate its loss-making Chinese operations through a JV with China Resources Enterprise, combining Tesco’s 134 Chinese branches, as well as the firm’s Chinese shopping mall business with the Chinese firm’s  2,986 supermarkets and convenience stores.

Tesco is splashing out £345m in staggered payments for a 20% stake in the JV, in which CRE will own 80%.

The announcement coincided with the release of Tesco’s financial results, which show profits down a third and group sales up just 1.9% due to a “challenging” retail environment in Europe.

The only bright spot was China where annual sales grew 9% to £1.7bn although Tesco’s pre-tax losses in the PRC almost doubled to £222m.

We’ve lost count of the strategy U-turns Tesco has made in China, but you can search back-issues of EngagingChina for  ‘Tesco’  here.