China Law BlogChina Law BlogChina Law for Business. Legal aspects of doing business in China. 
Articles
Western Companies Are Frittering Away China Employees. Or Not.
2009-06-12 07:02:00 Fascinating article at Access Asia on how Western companies are, at the exact worst time, cutting back on their employees in China . The article, "Are Foreign Brands in China About to Give It All Away??" says that many Western companies, run out of places like London and New York, are cutting back on their China operations so as to preserve cash and save money at home: By and large, in most sectors of the retail business, they had the locals on the run both as brands and retailers. Then last year’s financial crash. Since then two mantras have surfaced – the West is in freefall; China is surprisingly robust. Our sales are declining in the West; growth is still apparent in China. Good news then for those teams in China who did all the hard work over the last decade? Eeeerrr, no. Head offices from London to Paris to New York and back again panicked – big time. Cuts were demanded; cost savings had to be found – redundancies implemented. And it seems a sort of warped, nonsensic... More About: Companies , Employees
Form Contracts In China. You've Got To Fight The Powers That Be.....
2009-06-10 00:20:00 This is the second in a series of posts on Chinese contract law by co-blogger Steve Dickinson. The first post, "China Contract Law: Going All Clear On Us Now," discussed recently issued PRC Supreme Court explanations on various aspects of contract law. This post discusses how Chinese law tends to disfavor contractual disclaimers of liability. US courts tend to disfavor them as well, but workarounds are usually possible. This is not the case in China and we are finding that most of our US and European clients (particularly those in the shipping/freight business) do not realize this. In my recent post concerning the PRC Contract Law, I noted that restrictions on disclaimers of liability in form contracts are a particular concern. As I mentioned, form contracts are often used for cargo and other carriage contracts. The primary function of such contracts is normally to limit the liability of the carrier. This runs directly against the form contract provisions of the Contract Laws... More About: Fight , Form , Contracts , Powers
Think You Have A Well Known China Trademark. Think Again.
2009-06-08 11:30:00 China's Supreme Court recently confirmed what my firm has always been telling its clients: if you want to protect your trademark in China, you absolutely must register it in China. We have always said that because the likelihood is so slim of being able to prove that a trademark is a well known mark and the cost of trying to do so is so much higher than actually filing, that unless you are as well known as Coca Cola, you should just go ahead and register. China's Supreme Court just came out with an explanation saying essentially the same thing. Co-blogger Steve Dickinson explains this new explanation below. PRC Supreme Court Explanation of Legal Issues Concerning Well Known Trademark s by: Steve Dickinson The issue of protection of “well known” foreign trademarks is a continuing area of dispute in China. In an attempt to clarify some of the issues, the PRC Supreme Court recently issued an explanation of the issues arising in disputes relating to well known marks. This is... More About: China
Clinton, Obama, Saudi Arabia And China. Comments On The Comments.
2009-06-07 17:48:00 The other day, I did a quick post in a pique of anger at the US criticizing China 's Human Rights record while Barack Obama was travelling in or to Saudi a Arabia and Egypt. I found it absurd that we would be going after China for its HR issues at the same time we were (and have) pretty much completely ignored the far far worse records of Egypt and Saudi Arabia (and Syria, and Yemen and Libya and Zimbabwe, etc.). Not only do I find this selective calling out of countries hypocritical, but I also think it ineffective. On top of that, I see it being done not so much to bring about change in places like China, but to play well politically at home. Obama was elected on a platform of change and when he does things like that, he only reinforces that it's politics as usual. Needless to say, this post brought a wealth of comments and in this post, I respond to each and every one of your comments. First off, let me say that I appreciated ALL of your comments, even those that attacked... More About: Comments
China Contract Law: Going All Clear On Us Now.
2009-06-05 07:02:00 By Steve Dickinson One role of China 's Supreme Court is to provide guidance on the interpretation of statutes. These interpretations are directed at two fundamental issues. First, Chinese statutes tend to be short and general. Conflicting interpretations of such general wording is possible. Since China has no form of stare decisis, the only way to resolve such conflicts is through guidance from the Supreme Court. Second, most Chinese legislation is quite new and is based on foreign models. Without an historical background in the concepts, lower courts sometimes interpret the legislation in a manner clearly contrary to the intent of the drafter. Guidance from the Supreme Court serves to correct these aberrant interpretations. In accord with this role, the PRC Supreme Court recently released Some Explanations of Questions Arising Under the PRC Contract Law 中华人民共和国合同法若干问 的解释 (“Explanation”), which became effective on May 13, 2009 and can be foun... More About: Clear
I'm Sorry, But US Hypocrisy On Human Rights Is Continuing Apace Under
2009-06-04 09:43:00 1. I love my country -- the United States. 2. Of course I believe in human rights. 3. The US should strive to be a beacon on human rights. 4. When appropriate, and in ways that are appropriate, the US should encourage other countries to maintain human rights as well. Not in an idiotic Jimmy Carter sort of way, but in a sophisticated Henry Kissinger/Bill Clinton/Ronald Reagan sort of way. 5. I supported Hillary Clinton for president up until the very last minute. But Hillary (and Barack), would you please get a damn clue on human rights, would you please stop embarrassing my country, would you please stop being such hypocrites, and would you please stop using human rights as a way to advance your popularity at home. I am referring to the US (on today of all days) blasting China for human rights violations that mostly took place 20 years ago. I say today of all days because today is the day that President Obama is making nice to Saudi Arabia while touting his n... More About: Human , Rights , Human Rights , Hypocrisy
Foreign Real Estate Development In China. Long Term Leasing Can Be A Good
2009-06-03 12:02:00 China Economic Review recently published an article by CLB's own Steve Dickinson on foreign investors entering into long term leases of Chinese real estate. The article is entitled "Don't play for keeps," and since a paid subscription is required, we will provide the article Steve wrote before the professional editors gussied it all up. The Chinese real estate market remains a continuing lure to foreign investors. Though many North American and European investors have attempted to enter the market during the last decade, few have achieved solid success. Since China continues to be the strongest economy in the developing world, foreign real estate investors continue to search for the secret that will allow them to crack China's real estate market. One strategy gaining in popularity is to use a long-term lease instead of outright purchase for a development property. The use of the long-term lease is designed to deal with two major issues. First, since a lease is a contract an... More About: China , Estate , Real Estate , Development , Foreign
China Contract Protections And It Ain't Just Scrap.
2009-06-02 22:45:00 Scrap is very much an international business and due to its potential for rapidly changing prices, it is ripe for non-payments and international litigation. Many months ago, I was interviewed by Scrap Magazine regarding Chinese companies failing to pay on their scrap contracts. At that time, a whole slew of Chinese companies were backing out of their contracts to purchase scrap metal from US suppliers because the value of the product they had purchased had fallen precipitously since their date of purchase. The article is entitled, "Easing Export Concern," and subtitled, "In the aftermath of last fall's economic collapse and the ensuing trade problems, scrap sellers are seeking new measures to protect themselves in agreements with foreign buyers." It was written by Ann C. Logue and it really does a superb job of setting out the risk of not getting paid in all international sales. It talks about the pros and cons of letters of credit and it rightly concludes that the surest ... More About: China , Scrap , Contract
Breaking News: Blogger, David Dollar, Named Economic And Financial Emissar
2009-06-01 21:59:00 David Dollar , who heads up the blog, East Asia & Pacific on the Rise (a/k/a David Dollar's Blog) and the World Bank's China Director, has just been named by Timothy Geithner as "economic and financial emissary to China." Dollar, who was formerly an Assistant Professor of Economics at UCLA and a Visiting Professor at the Chinese Academy of Social Sciences in Beijing, really knows whereof he speaks when it comes to economics and China. Though there will no doubt be those who will attribute his pick to the favorable publicity I gave him in this post, (kidding!) I have to believe this particular pick was entirely on the merits. More About: News , Blogger , Breaking News , Financial
IT Outsourcing To China As Next Big Thing.
2009-06-01 13:15:00 KPMG recently came out with an excellent report on outsourcing to China (h/t to Experience Not Logic), entitled, "A new dawn: China’s emerging role in global outsourcing." KPMG summarizes its report as follows: Outsourcing is on the agenda of the Chinese government as they seek to boost foreign investment into China and support the development of the services sector. Companies are also looking at China as an alternative to India, especially in light of recent security and governance concerns. This paper looks at how China is moving up the value chain in developing the necessary infrastructure and outsourcing centers, and how that will impact the Asia-Pacific region and the rest of the world. Because my firm recently started doing legal work for a very large China outsourcing company, I do not think it appropriate or even fair for me to comment on this article, but I am citing to it because it most certainly is well worth the read. More About: Thing
China Sex, Mistresses, And Improper Payments, And What They Mean For Your C
2009-06-01 05:38:00 Fascinating post up over at CNReviews, entitled, "Husband and wife sue mistress for 330,000 yuan in “lover’s fees.” The gist of the case is that a married couple sued the husband's former mistress to require her to return 330,000 RMB the husband had given her during the course of the affair. The court ruled in favor of the married couple. I will leave the moral lessons for others to analyze, but I love this case for all it can teach about how China 's courts (and arbitrators) tend to make their decisions. And though I am relying entirely on CN Reviews for the case analysis, that is fine because the point I will be making is only that Chinese courts rely far more on equity than do Western courts. Chinese courts tend to give large account to what is "fair," not just to what the law says. This means that if a Chinese company is late on a contract because its own supplier was late in delivering it a necessary component part, the Chinese court may very well excuse the del...
Shanghai As World Financial Capital? Maybe Next Century.
2009-05-31 17:59:00 Just finished a fascinating article in Atlantic by Richard Florida, entitled, "How The Crash Will Reshape America." It makes some very interesting points as to why Phoenix and Las Vegas (and large swaths of Florida) may never recover and why New York, Austin, and Seattle (yeah), will do just fine. But within it, and of great relevance to this blog, is a section on why New York will remain as the world's financial capital and why, despite the projected growth of Asia's economies, we should not expect Shanghai , Hong Kong, or anywhere else to usurp it. At least not for an exceedingly long time. At first glance, few American cities would seem to be more obviously threatened by the crash than New York. The city shed almost 17,000 jobs in the financial industry alone from October 2007 to October 2008, and Wall Street as we’ve known it has ceased to exist. “Farewell Wall Street, hello Pudong?” begins a recent article by Marcus Gee in the Toronto Globe and Mail, outlining the po... More About: World , Financial , Capital , Century
Everything You Always Wanted To Know About Touring A China Factory.
2009-05-29 06:45:00 I know I should not admit this, but I find most factories pretty boring. It was not always this way. When I first started practicing law, I loved visiting factories, but the thrill is gone. Within about one minute of watching a basketball game, I have a good feel for the players and for the teams, but I could watch three hours of a soccer game and still not have a clue. Factories are like soccer for me. Beyond overall cleanliness and organization, I really do not have a clue. But, hey, it's not my job. But for those for whom touring factories in China is part of the job, I highly recommend a three part series over at the China Sourcing Blog. The series is made up of "China Plant Tour Tips - Part 1: Before Coming Over," "China Plant Tour Tips - Part 2: During Your Visit," and "More China Plant Tour Tips – How To Check The Plant." What do you think? More About: Factory , Wanted , Touring
China Translated.
2009-05-28 06:49:00 When we first started this blog we would occasionally make fun of mainstream media's China coverage. I just realized we have not done that for years and I attribute that mostly to a huge increase in good reporting coming out of China. My firm is frequently interviewed by China reporters on China law issues and so we are able to judge up close and personal who among the media knows his or her stuff. Tom Orlik knows his stuff. We first started working with Tom back when he was with Morgan Stanley and would bring co-blogger Steve Dickinson in to speak on China law to Morgan Stanley clients and at Morgan Stanley functions. Before JP Morgan, Tom was with the UK Treasury and the IMF. He now now writes freelance on China, mostly on economic and financial issues, mostly for the Economist Intelligence Unit, the Wall Street Journal, and the Far East Economic Review. When it comes to China finance and economics, you will be hard pressed to find better and, on top of all that, he's a... More About: Translated
The Chinese Are Coming, Part IXX, And This Time They Are Serious About Mino
2009-05-28 00:59:00 Caine: May I ask, master? When I leave the temple, what will be expected of me? Master Poe: To walk the roads of the land, and use what you have learned for the needs and benefit of the people. Cain: Will I always know when to act and when to stand off? Master Poe: That which you do not know, the doing will quickly teach you. Kung Fu, Episode 26 For years there has been talk of Chinese companies coming to America. And for years, my law firm has been involved in such deals that quickly failed over something as minor as the Chinese company refusing to pay more than $5 million for something that was clearly worth at least $50 million. Not entirely sure why, but Chinese companies have recently started getting much more sophisticated and serious. And FAST. My law firm just started working on two deals where we are representing Chinese companies seeking to buy minority shares in well established American companies and things are actually progressing rather nicely. But bec... More About: Time , Part
Pig Casings, Swine Flu, And Accounting For China Risk.
2009-05-26 04:26:00 My firm has always represented a number of fishing and other food companies. The reasons for this are that we are located in Seattle and food companies went international early. by about five years ago, almost all of our fishing clients were doing something in China . Most were either buying farmed fish from there or were shipping over their ocean caught fish and crab for processing there. One very internationally sophisticated client of ours was doing neither. We were scheduled to meet for lunch regarding problems he was having with one of his Russian deals and my plan was to tell him why he should be sending his product to China for processing, like just about everyone else. I started out with a set-up question as to why he was not shipping his product off to China, where processing would be "so much cheaper," expecting him to follow that up with questions for me as to what he should be doing to get going on that. Instead, he gave me a great explanation as to why he was ... More About: Accounting , Risk
China's Economy By The Numbers. Lots Of Them.
2009-05-26 02:56:00 The Beijing Axis business consultancy just came out with its quarterly "China Analyst" publication and it is chock full of nicely arranged economic statistics and predictions for China. If China economics is your thing, I recommend you check it out here. More About: Economy , Numbers
Guns In China. More, More, More....
2009-05-24 03:41:00 Homer Simpson: When I held that gun in my hand, I felt a surge of power…like God must feel when he’s holding a gun. Homer Simpson: "But I'm angry now!"(upon being told there is a three day waiting period on the gun he just purchased). I love talking about guns with Asian lawyers because their views on them are so....so un-American. Let's face it people, most Americans love guns. (This week's passage of a law allowing guns in National Parks is further proof of this.) And we Americans have a history with guns and an attachment to guns that is probably unique. Asian lawyers tend to be fascinated with this. And their assumptions about who carries a gun in the United States tends to be way off. I get a kick out of telling them about a relative of mine who owns about a thousand guns and another relative of mine who once put a gun to the head of his sister's boyfriend who was tapping on her window. Right when I see the shock in their eyes, I tell them that the relative ... More About: China , Guns
China, We Have A Problem. A Mostly True Story.
2009-05-23 10:45:00 My firm recently wrapped up a fascinating matter (it is nearly always bad news when your lawyer tells you that you have an interesting or a fascinating case). Even though the matter is nearly over, I am going to have to gloss over certain facts and make up other ones so as not to leave any possible identifiers. The thrust is entirely true and the result is as well and my reason for writing it also remains intact. Here goes. Young Chinese Child falls from a window in a room in which an American employee of our client is one of the few adults. Child is very badly hurt. Very badly. It now appears his injuries will probably not be permanent, but he also may be in recovery for a year. His medical expenses by US standards were fairly low, but they are astronomical by Chinese standards, particularly for this less than large city. A day later, the parents of the child come with a lawyer to tell this employee that they want six figures (in US dollars, not RMB) from him and from his ... More About: China , Story , True Story , Problem , True
China Auto. Are We There Yet?
2009-05-22 19:48:00 There are those who state confidently that China will own the worldwide car market within a few years (these people have been saying this for years -- check out this post from three years ago where I rightly said NO WAY) and there are those who state it will never get there. My only qualifications are that I come from Michigan and I have represented a few auto and truck manufacturers and a whole slew of auto parts manufacturers, including many in or going into China. But like just about everyone else, I have a view and mine is that China eventually will do well selling low end cars worldwide, but that it is not yet close to selling good cars in the United States. I spent seven hours in my car yesterday (driving back and forth to Wenatchee, WA) and there is no way I would have chosen a Chinese car for that trip. And it's not just me. I landed in Beijing last month with my wife and daughter. The first taxi in line was a very old VW. The VW driver started putting our luggag... More About: Auto
China Visas. I'm Getting Deja Vu Olympic Feelings, Part IV. New Repor
2009-05-20 20:05:00 Got an email this morning from someone I know in China , reporting the following: Police in Guangzhou are doing very aggressive passport checks to prevent what they call 三非 [the three must prevents]，meaning 非法入境 [illegal entry]，非法居住 [illegal housing]，非法就业 [illegal employment]. In a moment of candor, one very nice police officer admitted it was because of the CPC congress and the upcoming 60th anniversary of the revolution. The police came into Starbucks in a group and basically accosted a group of very well dressed foreigners, who appeared to be from the Middle East. These foreigners could not speak Chinese and the police could speak only a very little pidgin English. The foreigners were hustled off in a paddy wagon. I asked what would happen to them and I was told they would be held at the local police office until their identities can be verified. The police were extremely polite to me and just looked over my passport briefly. The community where ... More About: Olympic , Part , Feelings , Visas
When Not To (And When To) File Your China Trademark.
2009-05-18 15:35:00 Stan Abrams over at China Hearsay just did a great post entitled, When Not To File A Trademark (yes, you heard me). It is based on Duncan Bucknell's post, (Five reasons not to file a trademark). They both list the following five reasons not to bother registering a trademark: 1 - your business is only ever going to be confined to a subset of a country (and not extend to the whole country); 2 - you can’t afford it just yet; 3 - you don’t actually care if people use your brand without your permission (there are business models where this makes sense); 4 - you have no real brand, you rely on a descriptive moniker which attracts volume based sales, not brand loyalty; 5 - the product or service is still confidential and you don’t want competitors to be able to get an insight into it by monitoring the trade mark databases. I am going to analyze these five reasons with respect to China only and I am going to set out a few additional reasons why it does not always make sens...
Avoiding Chinese Jails. The Thai Bar Edition.
2009-05-18 09:18:00 A few weeks ago, I did a post emphasizing the need to follow China's laws so as to avoid jail time. My point (taken straight from Aimee Barnes) was that what actions that may be overlooked in your home country of Australia or the United States or some other Western country very well may be deemed to be criminal in China. I just read a Sydney Morning Herald article on how an Australian mother of four spent two nights in a Thai jail and is facing a potential five years in prison for allegedly having taken a bar mat. I am not saying this same thing could happen in China, but then again, I am also not saying it could not. This article on the mom in Thailand ought to convince you that what happens in the West is not necessarily what will happen in Thailand or in China. Or as Apple would say, Think Different. More About: Chinese , Edition
China IP Protection. "It's Getting Better All The Time...."
2009-05-18 00:25:00 I have a young relative who has for quite some time been "a challenge" for his parents. For years, whenever we would get together, we would all start out, charitably enough, by spending around thirty seconds talking about how "he's getting better." For the next ten to fifteen minutes we would then enumerate all the things he had done that made us all feel good he was not our child. China 's intellectual property protection tends to get the same treatment. There seems to be near universal agreement that things are getting better in China, and yet the focus is always on how bad things are. The International Trademark Association (INTA) is putting on its 131st annual meeting in Seattle this week and since I am nearly fully booked for breakfast, lunch, and dinner with someone attending, I figure I am going to be getting asked a lot about China's progress on IP. My answer will be as follows: Trademark. Much, much better than widely believed. Much (though certainly not all) of ... More About: Time , The Time
China Has Health Care Too
2009-05-15 05:18:00 A few months ago I was on a China panel at Northwestern's Kellogg Business School where, among other things, we were asked to list China's best opportunities. I stressed that because I am not a China business expert, I would have to answer the question based entirely on what I was seeing of my firm's clients and, based on that, I listed health care, technology, and food. If I had to pick just one of the three, I would pick health care and technology (I know I said one, but hey, it's MY blog). I would pick these two now because even within just the last few months, China's government has made clear, both in its policy statements and in its spending, that it is going to be increasingly emphasizing these two during the next few years. A couple years ago I did a post listing a whole slew of top China technology blogs and I plan to do another one soon. There is a surprising dearth of really good China food blogs and, as far as I know, no blog focuses on China's food busine... More About: Health , Health Care , Care
How To Take Advantage Of China's Stimulus. London, June 3, 2009.
2009-05-14 00:08:00 My friend Jeremy Gordon, over at China Business Blog, is going to be speaking at a London seminar on "what is happening in China and what businesses can expect." He is going to be part of three part series, the first of which is going to focus on how what UK companies should be doing in reaction to China's Stimulus Package: The Chinese government has announced a RMB 4 trillion stimulus package. What is this stimulus package? How much of it is ‘real’ money? How is it being spent? Which Chinese companies are most likely to benefit? Last but not least, what are the implications and opportunities for foreign businesses and financial investors? Speakers to include: Jeremy Gordon, UKTI: Business Specialist for China, with special focus on the China Stimulus Package and the opportunities for UK businesses Gareth Leather, Economist Intelligence Unit: Senior Editor/Economist: China/Asia region specialist; regular TV and radio contributor on China affairs including BBC, CNN and CN... More About: June
China: Good Business Gone Bad. You Want Pathos? I Can Do Pathos.
2009-05-12 12:57:00 So I just got an email from a friend criticizing me for being "relentlessly" upbeat during the "world downturn." He wrote this email after my post yesterday touting how China 's stimulus has been a giant positive. He tells me that I am losing credibility by acting as though things are "great all over." Though "we" have at times described him as the kind of person who walks around with a cloud over his head (and complains about it), this is my response. 1. I wrote just one post on how China's stimulus is working. Short term. 2. I said nothing about how great things are going in Pakistan, how truly enlightened Saudi Arabia is becoming, or how I'd rather be in North Korea (man, I have to get one of those shirts). 3. I am dedicating this post to my clients who have vanished. Yes, there is a horrible economic downturn going on right now and China related and international businesses are absolutely not immune. My last post focused on clients booming right now due to China'... More About: Business , Good
The Chinese Are Coming, Part XVIII. It's The Stimulus Stupid.
2009-05-12 06:05:00 “Who’s going to turn down a Junior Mint? It’s chocolate, it’s peppermint, it’s delicious. It’s very refreshing.” Cosmo Kramer, Seinfeld, episode #60 When I was in law school, I was rankled by students who complained about how busy they were. I mean, we were all taking pretty much the same courses. I swore I would never engage in that whine and I never did. Bloggers who apologize for being too busy to post also rankle me. I swore we would never make that excuse on this blog and for more than three years, we haven't. But today, talking about how I have been too busy to post much is the perfect segue to this post and so I cannot resist. The reality is that my firm has been crazy busy of late and it has been due mostly to China's stimulus. Now I am not a big fan of government intervention and I see government stimuli (that is the plural of stimulus, I looked it up) as the equivalent of a sugar rush (see Junior Mints above), but man, while it is happening,... More About: Chinese , Stupid , Part
China And The Foreign Corrupt Practices Act (FCPA). Sometimes You Just Hav
2009-05-10 16:46:00 You got to know when to hold em, know when to fold em, Know when to walk away and know when to run. You never count your money when youre sittin at the table. There'll be time enough for countin when the dealins done. -- Kenny Rogers, The Gambler A couple weeks ago, a long time client of mine called me with a concern. This is a tech products company that has been doing business globally since forever and with China for at least five years. It is a small, but very successful company and my dealings are typically with the company owner, which was true this time. Its product sells for around $100,000 each. I am going to have to be pretty vague here, but I can lay out the essentials. My client had been working with a Chinese company (let's call this China Company A) to which it had been selling its product for years. This Chinese company had told my client that a very large and clearly state owned company (China Company B) was interested in using China Company A to secur... More About: Foreign
Everything You Need To Know About Sourcing From China. (Well Almost Everyt
More articles from this author:2009-05-08 06:47:00 David Dayton over at the Silk Road International Blog has a great post on sourcing from China , entitled, "Smart Steps for Effective Sourcing in Tough Economic Times." It is an outline of a presentation he gives at Global Sources China Sourcing Shows. My biggest complaint is that David leaves his most important comment for last: "Get your lawyers involved early (just to be safe)." The highlights: -- Chinese factories have been stiffed for payments. "Don’t go into China with the attitude that 'hey, they should trust me, I’m from the developed country, I’m the one that doesn’t trust you.' The roles have been reversed. Dramatically." -- The economy has led to consolidation. "Lots of smaller, borderline quality factories have gone out of business." I would add that lots of smaller, borderline factories are still in business and you have to be very careful not to do hook up with one of these. -- "Money from the banks is mostly pushed through local governments and the... 1, 2, 3, 4, 5, 6, 7 |
|
 |
|
 |
