If I had to list just one thing I love about being an international lawyer, I would answer by saying the uncertainty/ever changing nature of my job. And with China, those things are on steroids.
About a third of the time when I am out speaking on China, someone in the audience (usually near the end of the question and answer session) asks how they can keep up with the law in their particular industry. I usually answer that great question by saying that “you can’t.” I then tell the story of how, many years ago, three attorneys in my office were on the phone discussing a China law or regulation. One lawyer was saying it said “X”, another said it said “Y”, and I said it said “Z”. I then very confidently added that they were looking at older versions of the law and I was looking at the one that had come down three weeks ago. One lawyer admitted defeat, but the other lawyer noted that he was looking at the version that had come out yesterday.
I then get more serious about answering the question and I talk about how they should be reading their industry trade publications, joining the right industry associations, staying in constant touch with their lawyers, etc.
I thought of that question today after reading a China Hearsay post, entitled, China Capital Account Restrictions Loosened for Foreign Investors. Stan Abrams begins his post by putting the difficulties of staying on top of Chinese foreign investment law in the form of a question:
Want to know how difficult it is to teach China foreign investment law? Less than two months ago I told my students about capital account restrictions and the influence of hot money and financial speculators on the approval process for cross-border capital flows.
The post then goes on to note how “that information is now out of date“:
China will clear the way for foreign investors’ capital to flow in and out of the country more easily by waiving and simplifying regulations, the State Administration of Foreign Exchange, or SAFE, said on Wednesday.
Starting on Dec 17, foreign investors won’t need to get regulatory approval to open bank accounts, remit profits, and transfer money between different domestic accounts, it said.
And the limits on the number of foreign-currency accounts and the amount of money that can be transferred will also be loosened, it added.
Stan rightly sees this as “good news” for foreign companies doing business in China but also as something requiring that he supplement his class. Stan then concludes his post by noting that “the fun, it never ends.”
Yup. He’s got that right.
But it is not only China’s constantly changing laws that make keeping up so difficult. The fact that so many of the translations of China’s laws are just flat our horrible does not help either. At least a couple of times a month, I get emails from law students from around the world (sometimes from companies too) asking if I can give them a cite or a link for a good English language translation or explanation of some particular area of Chinese law. My response is always the same:
Sorry but I can’t. We do our China legal research in Chinese because we just cannot risk outsourcing legal translation/interpretation to the web. Because of this, we do not make any real effort to keep up with the English language side of Chinese law and so we are not a good source for English language cites to Chinese law. If you want to read some really good English language books on Chinese law, I suggest you check out our blog post, Chinese Commercial Law Books In English. An Update.
But even the most current Chinese language laws/regulations oftentimes do not provide the whole picture. The forming of a WFOE provides a great example in that nearly every city has its own unwritten rules regarding its requirements. Some require audited financial statements and some don’t. Some require that the documents be notarized and consularized a particular way and some don’t. Some require that a particular officeholder sign particular documents and some don’t. I could go on and on.
China law. The fun, it never ends….