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China Joint Ventures. Can Things Get Any Worse?
2008-09-28 04:16:00
My 11 year old daughter is always asking me whether I can drive any slower. I usually respond to that by proving that I can. Seems almost as though China is now doing the same thing to me in response to my constantly harping on the dangers of China joint ventures? When I was just starting out as a lawyer, I negotiated what I thought was a great settlement for my client. The amount it would pay would be far less than we were expecting it would take to settle, and the other side would be giving us a more complete release than we were expecting. As part of this agreement though, my client, a Fortune 50 company, would have to allow the opposing party to pursue a third party in litigation, under my client's name. Legally, I thought that a very small price to pay for what I thought was a great settlement. I took this to the senior partner with whom I was working on the case, expecting nothing but kudos. He hated the deal. He agreed I had set things up to save our client mill...
More About: Things , Ventures

China's Brand New Labor Law Regulations. It's All Here.
2008-09-25 03:38:00
This post was written by Andrew Grieve, who works with us on our Chinese employment law matters. The implementation regulations for the new Chinese Labor Contract Law were promulgated on September 3. When the draft regulations were issued earlier this year, we discussed some of the proposed changes (here), and despite having shrunk from 45 articles to 38, the content of the regulations remain relatively intact. You can read the full text of the final version of the regulations, in Chinese, here. The newly issued implementation regulations have four sections (compared to three in the draft version), dealing with establishing the labor contract, terminating the contract, special issues with dispatched workers, and an additional section on legal responsibility. The biggest cuts were in the section on establishing the labor contract. A brief rundown of the contents of this first section of the final regulations follows: -- Employees who refuse to sign a contract within the f...
More About: China , Regulations , Brand

What Is Happening With China's Economy?
2008-09-22 09:11:00
China Comment tells us, here. Problem is that what is happening right this minute may not be what happens next week. If the US bailout fails to occur or to stick, I fear we are all going down.
More About: Economy , China

THE International Arbitration Center List.
2008-09-22 08:12:00
Was given this by Constance Kim, Los Angeles lawyer extraordinaire, a few months ago and then forgot all about it. Came across it today and realized how helpful it would be to our readers to put this online, so here it is. This is the most comprehensive list of international arbitration centers I have seen. Enjoy.
More About: International , List , The International , Center , Arbitration

China's Courts, Tenth "Best" Out of Twelve.
2008-09-21 07:59:00
Just came across this article discussing a ranking of various Asian countries' judicial system, conducted by Political and Economic Risk Consultancy (PERC) (h/t to Silk Road International Blog): 1,537 corporate executives working in Asia rated the judicial systems in the countries where they reside, using such variables as the protection of intellectual property rights (IPR) and corruption. Transparency, enforcement of laws, freedom from political interference and the experience and educational standards of lawyers and judges were also considered. "Year after year our perception surveys show a close correlation between how expatriates rate judicial systems and how they rate the openness of a particular economy," PERC said. "Better judicial systems are associated with better IPR protection, lower corruption and wealthier economies." The ratings are on a scale of zero to ten, with zero being the best: 1. Hong Kong, 1.45 2. Singapore, 1.92 3. Japan, 3.50 4. South Korea,...
More About: China , Courts , Twelve

McCain And Obama. None Of The Above.
2008-09-20 22:15:00
A bit off topic here, but it is something I have been thinking about for months and it just will not go away. It is that neither McCain nor Obama are up to the task of leading our nation. The other day, a good sized group of us from all political persuasions were discussing Carly Fiorna's comment on how none of the four running for President or Vice President are qualified to be CEO of Hewlett Packard. All of us quickly agreed none of them would even be in contention for that post. At the same time, none of us thought this point terribly relevant in choosing our President/Vice President. But, and let's please be honest here. How many people really believe either McCain or Obama are up to the task of running our nation? And why is it that every time I do a lot of reading on McCain and Obama and the upcoming election I ALWAYS find myself liking both of them even less than before? This WSJ opinion piece really brings it home. Their positions on the economy are really the ...

Research Guide To Hong Kong Law.
2008-09-20 18:29:00
Sergio Stone, Foreign, Comparative and International Law Librarian at Stanford Law School, and Roy Sturgeon, Foreign and International Law Librarian at Touro Law Center and a contributing editor at the Law Librarian Blog, have come out with what appears to be an excellent guide to legal research on Hong Kong law. The guide is entitled, “One Country, Two Systems” of Legal Research : A Brief Guide to Finding the Law of China’s Hong Kong Special Administrative Region" and Donald Clarke over at Chinese Law Prof Blog deserves the hat tip on this one.

Is China's Financial System Safe?
2008-09-20 11:27:00
China Financial Markets Blog poses this question in its post, "Is China Safe ?" Go there for both the post itself and for its long list of very thoughtful comments.
More About: China , System

China Tourist Attractions
2008-09-19 07:11:00
One of the things I truly love about blogging on China is the interesting people I meet. One of those is Eutak (Tak for short), a software guy from Singapore who spent many years working for Microsoft here in the Pacific Northwest and then in Beijing. Tak and I share a love for running/walking/biking around Green Lake here in Seattle and, more importantly, a reverence for the baked goods from Hiroki's bakery and for great sushi everywhere. Tak has an excellent China tech blog, called, appropriately enough, China Tech Blog, of which I am a regular reader. This blog focuses on "Chinese Internet, software, and information technology." Tak also has a super cool Web 2.0 site called funtouristattractions that really nicely sets out tourist attractions, historical attractions, cultural attractions, restaurants, hotels, nightlife, architecture, and shopping on interactive maps of Shanghai, Beijing, Qingdao, and Shenzhen. I checked out Qingdao on the site and was hugely impressed (...
More About: Attractions , Tourist

Trademark Protection In The Global Marketplace
2008-09-18 08:14:00
This article was written by my friend, Brian Geoghegan, who describes himself as having "practiced trademark and copyright law since graduating in 1985 from the University of California at Berkeley School of Law (Boalt Hall). In 2003, he finally left behind the megafirm lifestyle and founded GeoMark, a boutique trademark and copyright law firm." Trademark s are among the most important assets of any company. Indeed, if it weren't for trademarks, customers would be unlikely to even find a company's products. Naturally, then, most companies want to protect these essential and valuable assets to the greatest extent possible and therefore make sure that they are registered with the United States Patent & Trademark Office (the "USPTO"). But many companies stop there, thinking the job complete. It doesn’t occur to them that trademark rights are territorial and that owning a United States trademark registration creates no rights whatsoever outside the borders of the U.S. I...
More About: Global , Marketplace

Breaking News: CLB's Steve Dickinson On Bloomberg's "Asia B
2008-09-17 17:32:00
CLB's own Steve Dickinson will be appearing live (from Qingdao, China) on Bloomberg 's "Asia Business Tonight," tonight (Thursday) at 6:20 pm, China time. This translates to Thursday at 10:20 GMT, Thursday at 6:20 am, EST, Thursday at 3:20 am PST and Thursday 11:20 am, London time. Go here to watch it live on the internet.
More About: News , Breaking News

China Joint Ventures And Really Bad Milk. What Can You Do?
2008-09-17 07:53:00
CLB's own Steve Dickinson was interviewed today by New Zealand newspaper, The Dominion Post, regarding Sanlu melamine tainted milk, in an article entitled, "What Fonterra Didn't Know." Some facts first. Wikipedia tells us this about Fonterra: Fonterra Co-operative Group Ltd (NZX: FCGHA), generally known as Fonterra, is New Zealand's largest company by turnover. A cooperative, Fonterra is owned by approximately 11,000 farmers throughout the country. It is the sixth-largest dairy company in the world, and the most influential by far when it comes to determining international dairy trade, handling over a third of all international dairy trade. In 2005, Fonterra paid $153 million for a 43 per cent stake in the SanLu joint venture. Now let's get to the law. What sort of control can a foreign company expect to have as a 43% stakeholder in a Chinese joint venture? Steve very bluntly tells us in the article: Steve Dickinson, a partner at law firm Harris Moure, has been based i...
More About: China , Milk , Ventures

Melamine In China Baby Milk Powder -- Whoops Sorry.
2008-09-16 21:39:00
ImageThief is just out with a great post on the Sanlu melamine crisis. The post does an amazing job giving a history of China 's food safety problems, dissecting the current one, and discussing in real world terms Fonterra (the New Zealand company involved in a joint venture with Sanlu) has handled it, and how Fonterra should have handled it. The post is entitled, "Melamine in Sanlu milk powder? Now that's a crisis!" and it is a must read. UPDATE: Peter Ford over at the Christian Science Monitor did an excellent story, entitled, "Behind bad baby milk, an ethical gap in China's business." I know this is not what non-lawyers want to hear, but unless and until any and all companies tied in with incidents like this are forced to pay by way of huge court verdicts, this sort of thing is going to continue.
More About: Baby , Milk

The Impact Of China's Labor Contract Law.
2008-09-15 13:12:00
By: Dan Harris and Brad Luo It has been a little over eight months since China enacted its groundbreaking new Labor Contract Law (“LCL”), which is just enough time to preliminarily assess its impact. The LCL has already greatly impacted employee treatment in China and greatly impacted how Chinese employees view their rights. It also has increased employer costs, but less than publicized. The LCL has caused some companies to go out of business and caused other companies to leave China for other countries less protective of their workers, but many of those companies were not terribly profitable in the first place. Before enactment of the LCL, employee abuse was rampant in China and worsening. Labor disputes in China increased more than thirteen-fold between 1995 and 2006 and a large and growing number of these disputes erupted into public demonstrations. Most Chinese labor law experts viewed the existing labor laws and regulations as inadequate for solving employer-empl...

China Baby Formula. Here We Go Again.
2008-09-15 06:10:00
Whenever there is a big food safety scandal, two things happen. Companies start calling us asking if we can protect them from such problems (we can improve their odds but nothing is guaranteed) and the press starts calling us with questions as to what went wrong. First with the press. Bloomberg news is out with a story, entitled, "China Says 432 Infants Have Kidney Stones From Sanlu Formula ," quoting CLB's own Steve Dickinson on this latest China food scandal: The problem may stem from cost pressures combined with government price-caps, according to Steve Dickinson, a partner at law firm Harris Moure Plc who has studied China's food safety system. The Chinese government has limited price increases of staple goods, including milk products, this year to reduce the impact of inflation on consumers. ``These companies aren't really permitted to price their products at a commercially reasonable price,'' Dickinson said in a telephone interview from the eastern Chinese city of ...
More About: Baby

McCain And Obama On China. In Their Own Words. BIG YAWN!
2008-09-15 02:35:00
I bring this to our readers as a public service, along with the warning that if you read either one while lying down, odds are you will fall asleep before you get to the second one. Anyway, I give you McCain and Obama , in their own words, on China , written for AmCham. The summary of both is that China has done great things (duh!), still has a ways to go (duh!), and the US should cooperate, except where it does not make sense to do so (duh!). Yada, yada, yada. One can hardly blame America for focusing more on Sarah Palin's glasses? UPDATE: Check out China Rises for an in depth review of the China policies of McCain and Obama. FURTHER UPDATE: Asia Logistics Wrap does an incredible job analyzing the positions of the two candidates on Asia, including China, in a post entitled, "US Presidential Candidates on Foreign Affairs/Trade with Northeast Asia."
More About: Words

China Sales Contracts. Do You Know Where Your Law Is?
2008-09-12 18:14:00
Will Lewis over at Experience Not Logic (ENL) does an excellent job explaining a somewhat difficult but important legal concept in the international sale of goods. The concept is choice of law and the point of ENL's post, entitled, "Sales To and From China . What Does Your Choice of Law Clause Look Like?" is that companies frequently intend to have their contracts operate under one law, but mistakenly write their contracts in a way that some other law will apply. Let me explain. With few exceptions, the Uniform Commercial Code (UCC), Section 2, governs the domestic sale of products in the United States. With few exceptions, international product sales contracts are governed by the United Nations Convention on Contracts for the International Sale of Goods (CSIG), if the contract is between companies from countries that have signed on to CSIG. Both China and the US are signatories, as are nearly all other leading commercial nations. But here is where companies make their mis...

Obama/McCain -- The Foreign Policy Differences.
2008-09-10 10:30:00
Leave it to Fouad Ajami to put out the best article I have yet seen on the differences between McCain and Obama on foreign policy. Entitled, "The Foreign Policy Difference," it makes no claim as to which foreign policy framework is better, nor do I, but if you want to get to the heart of the very different ways in which McCain and Obama see America's role in the world, you should read this article.
More About: Foreign Policy , Differences

Do You Know How Many China Employees You Have? I'll Raise You One.
2008-09-10 09:31:00
The other day I was searching for an email from a client named "Joe" and I came across another Joe from whom I had not heard in quite a while. So I shot the other Joe an email to ask him how his China business was going and he replied to me today by saying he was operating it in "stealth" mode but that it was going well. I immediately went into lawyer mode and told him that if he was using independent contractors in China, he was looking for trouble. I then told him how my firm has been working on a whole slew of cases for foreign companies in China who are being sued for various benefits (like an employee termination package) from people that were never employees. I went on to say that in most instances, China's labor officials are siding with the putative employees against the foreign companies and our role has mostly been to negotiate a settlement with the "employees," oftentimes by hinting that our client is so tired of this sort of thing they are thinking of leaving Ch...
More About: Employees

Chinese Multiculturalism. Is Skin Color The Determinant?
2008-09-10 08:48:00
The Useless Tree has a very long, very thoughtful post on what constitutes Chinese and where China is going in terms of becoming a multicultural society. The post is entitled, "Can A Black Man Become Chinese?" and it is well worth a read.
More About: Skin , Color , Multiculturalism

Must Read China Post. It's So Hard To Be A Saint In The City.
2008-09-08 02:55:00
You have to check out Danwei's post, entitled, "It's not easy for a migrant worker in the legislature." I don't even want to tell you what it is about, because I see it being about so many things, some of which go well beyond China . You just will have to trust me that this is a must read. What do you think?
More About: Post , Read , Hard , China Post

How To Dodge The Bullets Of Opening A School In China
2008-09-08 00:18:00
The Middle Kingdom Life Blog (an absolute must read for anyone thinking of doing anything education related in China ) has a two part series on what it takes for foreigners to open a school in China. (h/t to China Journal) This quote from a foreign school owner, cited at the beginning of the first part of the series, sums it up: "If I had known what I was in for, I would have instead shot myself in the head; twice.” The posts are "Opening Your Own School ." Part One is here. Part Two is here. Both are written by Ken Hayes, who describes himself as "a former U.S. Army officer and professional educator who had a long and successful career working in corporate training, public education and private sector management prior to moving to China several years ago. Ken is a frequent content contributor and consultant to the guide and, together with his Chinese wife, owns and manages a very successful private English language school." Surprisingly, they are amazing insightful. I say su...
More About: Dodge , Bullets

China Court Dismisses First Anti-monopoly Case. That Figures.
2008-09-07 22:55:00
Xinhua story out today on how "The No. 1 Intermediate People's Court of Beijing on Thursday rejected an anti-monopoly case considered the first of its kind in China ." (h/t to Zhongguofalu) The court dismissed the case on "procedural" grounds. It appears the ruling was based on the plaintiffs' having delayed their filing, even though the alleged wrongdoing continues. Though it is very difficult to piece together a Chinese court decision from an English language article in a Chinese newspaper, I am still not surprised by the result. I am not surprised by the result simply because I simply do not believe China's courts are ready for antitrust cases and their response to this will be to dismiss them on whatever grounds they can find. We will hunt down the Chinese language decision on this case and will report back on it if it presents anything new.
More About: Case , Figures , Anti

Ultimate China Sourcing Guide, Part I. AND Part II.
2008-09-06 14:38:00
Bizcult just did a very good post setting forth the basics of how to find a China supplier. The post, entitled, "Ultimate China Sourcing Guide , Part I," very nicely analyzes the pros and cons of finding suppliers through trade fairs, online, search engines, and trade associations. All good. Where it falls down however, is on what it does not say. Nowhere does it say that it is critical to visit any supplier before signing on the dotted line. I suspect that advice will be in part II of the series, but not mentioning it at all in Part I is rather dangerous. A real world example is in order here. I had lunch with a long-time client/friend yesterday, who had just returned from China looking for a supplier of ultra high end boxes for a luxury product. My client gave the following explanation as to how he had found the right company to make the boxes: I started out focusing on Shenzhen because I have been there many times before and because it is close to Hong Kong, where I somet...

China For Business Goes Beyond Beijing And Shanghai.
2008-09-04 17:52:00
China Business Blog just did a post on China's best cities for foreign business, appropriately entitled, "New Cities On The Block." The post starts out discussing a recent Forbes Magazine ranking that sets out China's "Best Places in China for Business," as follows: 1. Hangzhou 2. Ningbo 3. Dalian 4. Shanghai 5. Wenzhou 6. Beijing 7. Suzhou 8. Wuxi 9. Shaoxing 10.Shenzhen The Economist Magazine's Business Intelligence Unit, did its own China city ranking, based on economy, "market opportunities," labour market, infrastructure, and environment (mostly air quality) and its top ten ranking was as follows: 1. Shanghai 2. Guangzhou 3. Beijing 4. Hangzhou 5. Nanjing 6. Shenzhen 7. Tianjin 8. Qingdao Xiamen 10. Ningbo 11. Suzhou 12. Fuzhou Chengdu Dalian 15. Foshan China Business Blog sees these rankings as making clear the "that, just as the China story has moved on from being just about low-cost exports to being about added va...
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Dudano, Mind Your China Manners. Or How To Make International Whoopee.
2008-09-04 09:49:00
Back before the true advent of reality TV, I used to love watching the Newlywed Game. Back in its day, that show, more than any other, evidenced the lengths to which people were willing to humiliate themselves for fifteen minutes of fame. My favorite episode was when the host, Bob Eubanks, asked the wives if they were to write a book about themselves that devoted one page to each man with whom they had made whoopee, would it be a page, a pamphlet, a novel, or an encyclopedia? (I am not reciting this word for word, but I am getting the gist here.) With the husbands off stage, one of the wives said encyclopedia. When her husband returned, he guessed she had said a page. When he learned she had said encylopedia, he was both stunned and unhappy and he got her to admit she had always told him he was the first. At which point, Eubanks, in his usual inimitable style, asked the wife why she was telling the truth now. The wife replied, "because I can't lie on National TV." I thou...
More About: International , China , Mind , Make , Manners

Steve Dickinson To Speak On China Law And Economics At China Economic Revie
2008-09-03 20:55:00
China Law Blog's own Steve Dickinson will be the Keynote speaker at the China Economic Review Breakfast Series on Friday, September 26, at the JW Marriott Hotel at Tomorrow Square. Steve's talk will begin at 8:40 am, but the breakfast itself starts at 7:30 am. CER describes this event as follows: Following the sold out China Economic Review Breakfast with Andy Xie, we have our next event coming up on September 26th, this time featuring guest speaker Steve Dickinson, Partner and China Manager of Harris Moure PLLC. As a renowned lawyer and long term China resident, Steve Dickinson is particularly knowledgeable on the legal and economic landscape of China. He is the author of the popular China Law Blog. Steven was named as one of Washington State's "5 Most Amazing Attorneys for 2005" by Washington CEO magazine and has published many articles on China in prestigious law journals, including Columbia Journal of Transnational Law. Steve was the first attorney invited to China by a...
More About: Economics , China , Speak

Obama/Biden vs. McCain/Palin On China
2008-09-02 08:58:00
China Comment has a nice piece up, entititled, "China and the American Election," analyzing which side (Obama /Biden vs. McCain/Palin) would be better for US-China relations and concludes McCain likely would be, by a slim margin. What do you think? NOTE: Silk Road International just came out with its own advice regarding the candidates' positions on China: don't believe "anything" you hear. Will Lewis over at Experience Not Logic, in a post entitled, "Obama's Acceptance Speech & China," calls himself an Obama supporter, but dissaproves of Obama's China comments at the Democratic convention, but notes that "this political race has greater implications than trade with China and I'm mostly willing to overlook what Obama is currently saying about China, and hope that it is still just campaign rhetoric."
More About: China

China Arbitration. When, Why, Why Not, And Where.
2008-09-01 06:59:00
Co-blogger Steve Dickinson recently wrote a column for the China Economic Review on the plusses and minuses of arbitration provisions in contracts with Chinese companies. The article is entitled, "Overseas arbitration and enforcing contracts in China," and, not surprisingly, it says that decisions on whether to arbitrate should be made on a case by case basis. Steve's article starts out by noting that written contracts are "essential" for protecting the rights of foreign companies doing business in China, but such contracts are of no value if they cannot be enforced. Steve then notes how foreign company distrust of China's legal system too often leads them to insist that any dispute be subject to foreign law and resolved outside of China even though doing this sometimes renders the contract "practically or legally unenforceable." Steve then sets out "three common dispute resolution disasters": Disaster 1: Exclusive jurisdiction in a foreign court. A Chinese supplier has...
More About: Arbitration

National Security Review Under China's New Anti-Monopoly Law
2008-08-29 23:48:00
By Steve Dickinson China 's National Development and Reform Commission (NDRC) recently reported on its plans for forming an interagency committee to review the national security impacts of foreign acquisitions of Chinese companies. Contrary to many of the news reports in both English and Chinese, this is not a new policy adopted by the NDRC. The formation of such a committee is consistent with longstanding China policy and it is required by law. China's Anti Monopoly Law (AML) became effective on August 1, 2008. Article 31 of the AML provides for national security review of foreign M&A transactions as follows: Article 31. If the merger with or acquisition of domestic enterprises by foreign investors or other forms of concentration involving foreign investors concerns national security, in addition to the review for concentration of undertakings in accordance with the provisions of this Law, it shall be examined for national security review in accordance with relevant regulat...
More About: Security , National Security , Review