The Painted Veil On China Law
Saw the movie, The Painted Veil this weekend. Decent movie. Fairly thin plot. Nice scenery of 1920s China.
In my favorite scene, the protagonist (Edward Norton) goes with an army colonel to visit a local warlord to convince the warlord to use his men to pick up and immediately bury the corpses of those who had died of cholera. Norton reasons with the warlord by talking about health and sanitation and the like. The warlord says no. The colonel then steps in and talks admiringly of the warlord's mansion and the surrounding area and then says he is going to need to call in military reinforcements to handle body removal. The warlord immediately says that will not be necessary.
Nothing has changed to the extent that, just as in the 1920s, if a foreigner wants to get things done in China, he or she must meet China on its turf.
The movie also does a nice job conveying how China viewed its foreigners during this time. China belongs to the Chinese. The Chinese do not really want foreigners in their country, even doctors there to save lives. Foreigners are in China because it makes sense to have them there. Foreigners are not Chinese and they will always be treated as such. China is for the Chinese.
Certainly when it comes to Chinese law enforcement, little has changed.
There is one law in China for Chinese companies and that law has little or nothing to do with you as a foreign company. There is another law in China for foreign companies and that law does apply to you. The laws that do apply to you are likely not all that different from the laws that apply to you in your home country and you are no doubt used to following the laws there. You should view China similarly.
I first talked about differing law enforcement more than a year ago in the context of foreign companies needing to hew to the highest environmental standards:
Foreign companies will be affected by China's greening in two very different ways. First, there is a huge need in China right now for experienced, technologically advanced environmental services firms, particularly outside Shanghai. Companies are being shut down in large part because they lack environmentally sound options. Second, foreign manufacturers will need to become more cognizant of China's current and proposed environmental laws.
We are aware of a large Fortune 500 retail company that is opening units in China that meet or exceed the toughest United States environmental laws. I estimate this company's environmental sensitivity will cost them at least an additional $25,000 per unit, yet I am firmly convinced this company is doing the right thing. This company's actions make sense because the odds are good that China's environmental laws and enforcement will get tougher over time, and building environmentally sound units now will almost certainly cost less than having to retrofit existing units a few years from now. On top of this, people often get very emotional about the environment and I can see Chinese citizens getting very angry at a foreign company whose units in China are less environmentally sound than their units in the United States or elsewhere. This is obviously even more likely to be the case if there were to be some sort of environmental disaster.
I spoke of it again more recently in a quick post on the recent furor in China over McDonald's and KFC purportedly underpaying its workers.
That post elicited the following dead on comment from one of the guys over at Sinocidal:
When in China, do as the law says, not as the Chinese do. The laws are not intended to be enforced fairly - they're their to be interpreted and enforced as local government sees fit to protect their clan, kin and cash-cows.
Bottom Line: The best way to get into legal trouble in China is to listen to your Chinese staff or Chinese business partners on legal matters. There is absolutely no reason to expect these people to know anything about the intricacies of Chinese law as applied to foreigners as they are not lawyers or even foreigners. The best way for foreign businesses operating in China to avoid legal troubles is to know the laws and follow them, even when you know damn well your Chinese competitors are not.
For a particularly sobering look what can happen to foreigners who get "too comfortable/too local" in strange lands (Nicaragua, in this case), check out this post on the Going Global blog, entitled, "A Cautionary Tale: No Matter How Familiar, We Are but Guests in a Foreign Country."
http://www.chinalawblog.com/cgi-bin/mt/mt-t.cgi/1852
» China's New Labor Law: Enforcement Is The Key China Law Blog
The Christian Science Monitor just quoted me in a very fine article written by Jude Blanchette on China's newly enacted labor law, entitled, "Key issue for China's new labor law: enforcement": "As is always the case with China's laws, the... []


Comments
"First, there is a huge need in China right now for experienced, technologically advanced environmental services firms, particularly outside Shanghai."
And all of those firms know this, but they also know that it is easy to get screwed for pay since the gov't is the only entity that is supposed to be footing the bill and they fear getting bogged down in litigation/extortion for the final results, with the provincial gov't and Beijing not understanding or caring about the realities of remediation. Instead, these gov't bodies in China will spend all of their time trying to find technicalities to force the foriegn consulting companies to absorb the cost themselves for not removing every atom, molecule or organism. And if the area being cleaned is still exposed to continued pollution, the foreign consulting company will be taken to task to fix the problem at the source with with no increase in budget.
There is lots of potential for environemntal companies in China but for the most part China a represents a Venus fly trap. I make it a point to highlight the political badness of doing this kind of work in China with my company.
The makers of remediation equipment would also be pressed into technology transfers and forced to hire worthless kids of gov't officials for their China staff as part of any contract.
"The movie also does a nice job conveying how China viewed its foreigners during this time. China belongs to the Chinese. The Chinese do not really want foreigners in their country, even doctors there to save lives."
This fits in nicely with the previous thread on Chinese racism. Chinese regard all of us as dirty barbarians, which is complete racism.
Posted by: nanheyangrouchuan | April 3, 2007 12:15 PM
The Painted Veil has already been shown twice during prime time on CCTV. Was this movie a cooperation between Warner Bros. and CCTV? Despite a thin plot, it was too good to be a telemovie, especially when the majority of a sweaty sex scene seemed to have been cut out.
Posted by: Xiao Zhu | April 3, 2007 6:00 PM
nanheyangrouchuan --
It's not racism, it's the other. We are the other and it is a mistake to forget this.
Posted by: China Law Blog | April 3, 2007 7:03 PM
Xiao Zhu --
I am not aware of any CCTV involvement in the production and I stayed until the very end. I am either getting really old or there was no real cutting for the TV version because I do not remember a terribly sweaty love scene and it is certainly not due to my not being a fan of Naomi Watts.
Posted by: China Law Blog | April 3, 2007 7:08 PM
why you didn't say that foreign companies are enjoying more favorable corporate income tax policies than local Chinese companies? The truth is foreigners are treated much better than Chinese
Posted by: Y.Y | April 3, 2007 11:40 PM
Hey China Law Blog,
I really agree with your statement up above. We are the Other in China, and we have to remember its not the same as racism.
Not sure if you agree, but I think an idea like racism affects the West more because of Atlantic slavery. China has always had its only system of subjugation which has developed without much outside influence (comparatively).
-First time reading, hope to keep posting!
RB
Posted by: Reggie B | April 4, 2007 6:13 AM
Not racism? Perhaps not only racism, but an important part of the problem is that foreigners are judged by who they are not by what they do. That is one definition of racism, at least outside of China. Not that this is unique to China, but when there were separate laws in the US or Australia that singled people out by nationality or ethnic origin, people eventually started to call this by its right name. And eventually things started to change.
Why can't we do that in China? Why is it that we have no problem denouncing the most trivial incident in Japan as an expression of racism, while the same event passes as an expression of an unchanging culture in China? Could it be that we only discuss racism when it is a possible topic of conversation, not when it is actually a problem?
Then, of course, we have the reasonable expectation that newcomers in any country learn the language and do their best to fit it in. Yes, I have tried - but I can't change my skin color. I can live in a Chinese housing compound for a year, and most of my neighbors still stare at me as an animal. That is not just an expression of curiosity, that is an expression of an attitude that it is OK to treat strangers like non-human. But why bother getting angry? China is China. And China never changes, right?
Posted by: Amban | April 4, 2007 6:21 AM
Amban: When there were separate laws in the US or Australia that singled people out by nationality or ethnic origin, people eventually started to call this by its right name. And eventually things started to change.
There are separate laws in the United States and Australia that single people out by nationality. If you don't have US or Australian nationality you get different treatment. If you are a PRC citizen of European descent and get different legal treatment, this is a problem, but if you are not a PRC national, then any legal differences aren't particularly objectionable.
In practice, I've found that most US citizens in China get treated a lot better than local people. Local people care a lot less about the law, because in general, they are in much less of a position to use the law than outsiders.
Posted by: Joseph Wang | April 4, 2007 9:19 AM
Speaking of films, may I recommend 'The Postmodern Life of My Aunt' to you? I would love to see you do a review on it. Unfortunately the official website is in Chinese only, but the film is making its round through many film festivals worldwide and the English-subbed DVD should be coming out soon.
http://www.postmodernlifeofmyaunt.com/
There are a lot of subtle jokes on 'postmodern' life in China, and subtle touches as well. Here is a review on the word pun in the title of the film:
http://www.danwei.org/film/whats_so_postmodern_about_my_a.php
Posted by: Wabisabi | April 4, 2007 9:25 AM
Joseph Wang:
Sure, there are certain things you can't do in any country if you are not a citizen - be it the US or China. You can't vote, get elected, there are certain jobs you can't get. I never questioned that. Yet, I cannot see what the rationale is for the blantant discrimination of foreigners in China. I can stay months in the US without being reminded that I am not a native to this country, but there are some hassles. In China, I get reminded everyday. Constantly. Incessantly. By virtue of your origin and US citizenship, it seems that you have the privilege of being able to move seamlessly between China and the US, and that's good for you. I don't have that luxury and my grievance is not even considered legitimate.
Posted by: Amban | April 4, 2007 7:45 PM
Amban: I can stay months in the US without being reminded that I am not a native to this country, but there are some hassles. In China, I get reminded everyday. Constantly. Incessantly.
Everyone sees different things. It is rather difficult for a PRC national to get into the United States legally, and if you in the US illegally, then you are very well reminded of your status constantly, If you are from another developed country like Germany or Australia, you can float through the United States without too many problems. However, if you are from Mexico or the PRC, you can't, and if you are poor and undocumented, then you get into really big problems.
Amban: By virtue of your origin and US citizenship, it seems that you have the privilege of being able to move seamlessly between China and the US, and that's good for you.
Yes, it is good, and I need to constantly remember how good it is. You may see different things, but in my experience, people with foreign passsports and skills get *way* better treatment than local people.
I'm not trying to belittle what you have seen. China is big and people see different things. However, in my experience, the discrimination runs the other way, and people with foreign passports get treated a lot better than local people, largely because people with foreign passports have the option of leaving whereas people without them, for the most part, don't.
Posted by: Joseph Wang | April 5, 2007 8:31 AM
YY --
My sense is that despite the laws, foreign companies pay at least as high a percentage in taxes as Chinese companies. Are you disputing that the laws are more strictly enforced against foreign businesses than against Chinese businesses?
Posted by: China Law Blog | April 5, 2007 5:28 PM
Reggie B --
Thanks for checking in. I put that sentence in there because I recently did a post on racism in China and I wanted to be sure to separate out these more business related issues from that. Do come back.
Posted by: China Law Blog | April 5, 2007 5:30 PM
Amban --
China does change. China was pretty shut off from the rest of the world for some time but that is changing and its attitudes likely will change with that. I can remember being in some smaller Korean cities 15 years ago. I would get up early searching (almost always in vain) for an English language newspaper, but mostly just for the walk. Kids on their way to school would look, point, and laugh their heads off at me. That has changed. Was that racism? I don't think it was; I think it was ignorance/fascination. Of course, it is easy for me as a White person to just brush it off, but still....
Posted by: China Law Blog | April 5, 2007 5:33 PM
Mr. Wang --
Is getting treated "better" really better? Or is getting treated better itself a form of racism?
Check out this post: http://www.chinalawblog.com/chinalawblog/2007/02/china_where_eve.html
Posted by: China Law Blog | April 5, 2007 5:47 PM
Why not mention the fact that in the U.S., Asian Americans with the same level of education generally have a harder time getting jobs than their Caucasian equals, and even when they do get those jobs, there pays are lower, and this is today.
Or when the jobs were competitive, the U.S. Congress passed the Chinese Exclusion Act?
I suppose you can argue that the laws are enforced differently and that is a difference, but is it worse to openly endorse racist laws or to enforce laws selectively? They are both pretty bad.
The fact is that the U.S. has benefited from many openly discriminatory laws to get to its wealth level today, and is so ready to judge laws of a country that is desperately trying to develop and save some of the benefits inside their country.
Posted by: David | April 8, 2007 10:21 PM
David --
Thanks for checking in.
"Why not mention the fact that in the U.S., Asian Americans with the same level of education generally have a harder time getting jobs than their Caucasian equals, and even when they do get those jobs, there pays are lower, and this is today." I did not mention this for the same reason I did not mention 200 million other things I could have mentioned: not enough space or time and not terribly relevant.
The Chinese Exclusion Act was a long time ago. That is another reason I did not mention it. Oh, and if you did not notice, this blog is called the China Law Blog, not the US history blog.
Racist enforcement of laws is better than racist laws, but you are right that both are bad. I do not equate China's unequal enforcement of laws with racism, however.
I do not think the US has benefitted from "openly discrimatory laws." In fact, I believe our history of discrimatory laws hurt us. I have no doubt that the US economy as a whole would be better off if we had never had racist laws and if there were no racism here today. If one believes in the benefits of free markets (and I do), one has to view racism as a ridiculous and completely unfounded inefficiency and economic drag.
I actually do not view China's unequal enforcement of laws as much of a moral issue. I see it as an economic issue and simply something foreign companies have to deal with. So to that extent, I do not even think I am judging them. At the same time, however (and though I am always preaching patience regarding China's laws), I do not think the excuse of developing can justify everything and I do not think that excuse mandates complete silence either.
Posted by: China Law Blog | April 9, 2007 7:28 AM
A great read, very informative
Been looking for a blog like this one for a while
Keep up the good work.
Posted by: BigJohnmmme | August 23, 2007 11:03 PM