China Law Blog

A few weeks ago, a client who will be opening a factory in China within a couple of months told me how much he has been learning about China by following people on Twitter and following their news links. He then asked me who if I had a list of "China people" he should be following.

I said about all I could tell him is that he should go through the people I follow on Twitter and pull out those related to China. The problem there is that I follow about 900 people and many of them have absolutely nothing at all to do with China. This morning, while perusing Ad Age China, I came across an excellent article by Normandy Madden (yes, she was named after the region in France) entitled, "25 China Experts You Should Follow on Twitter

The caveat is that I do not believe any of the 25 people on the list are China experts (myself included) and I would guess all 25 would agree with me on this. Calling someone a "China expert" is like calling someone an expert on the United States. There are no U.S. experts. There are US historians expert on particular historical periods. There are US economists, expert on particular aspects of the US economy. There are US lawyers, expert on particular aspects of US law. Etc., etc., etc. Same is true of China. Having said that, here's the list:

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US Commerce Secretary Gary Locke will be leading a clean energy business development mission to China from May 15 to May 21 (h/t AmCham China News). According to the Department of Commerce's website regarding this trip, the cost will be as follows:

After a company has been selected to participate on the mission, a payment to the Department of Commerce in the form of a participation fee is required.

Large Companies Principal Participant fee: $10,000.00

Small & Medium Sized Enterprises (SMEs) Principal Participant fee: $8,500.00

Additional firm representative (both Large companies & SMEs): $3,300.00

Expenses for travel, lodging, most meals, and incidentals will be the responsibility of each mission participant.

You have until February 26, 2010, to apply for the trip. Click here for more information.

Participation in the China portion of the trip is not dependent on participation in the Indonesia portion.

The Department of Commerce sees China greentech as a great opportunity for US businesses:

China represents a great opportunity for U.S. companies in the sectors of clean energy, energy efficiency, electric energy storage, and distribution and transmission.

In response to rapid economic growth and an increasing demand for energy, the central government has made clean energy and energy efficiency strategic priorities.
The 11th Five-Year Plan (2005-2010), has set targets to reduce energy intensity per unit of GDP by 20% as well as reduce emissions for major pollutants, such as carbon dioxide and sulfur dioxides, by 10%.
This focus on renewable energy, energy efficiency and improved electricity infrastructure creates tremendous opportunities for U.S. companies.
U.S. companies have the chance to launch or increase their current sales in China by joining Secretary of Commerce Gary Locke as he leads a delegation of U.S. businesses on the China Energy Business Development Mission May 15-21, 2010.

The purpose of this mission is to promote US companies:

This Mission is designed to promote U.S. companies with clear potential in the clean energy, energy efficiency, and electric energy storage and transmission and distribution sectors. Mission participants will benefit from customized on-site services and opportunities, including:

-- Individual company pre-screened business appointments with potential buyers, agents/distributors and partners;
-- Latest information on market access and business opportunities; and
-- Opportunities to meet with senior government officials and industry decision-makers.

According to the Commerce Department, this mission makes sense for "U.S. companies with clear potential for business in energy-related markets in China," including the following:

-- U.S. companies already doing business in China as well as experienced exporters seeking to entry to the Chinese market; -- U.S. companies involved in major project procurement in China; -- U.S. companies interested in addressing obstacles to trade in these markets, including transparency, rule of law, financial reform and intellectual property rights protection.

Clients and others I know who have gone on trips like these tend to be evenly divided between those who swear by them and those who view them as a waste of time. I am not sure if this division is due more to the quality of trip itself or to the fit between the company and the trip.

Would love to hear from anyone who has been on a US government sponsored trade mission. What do you think?

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I hate it when I have to get all philosophical, but since China Tax Insights has thrown down the gauntlet, I feel I must. What is an international lawyer and what exactly do international lawyers do and what exactly should international lawyers do. Please bear with me here as I swear this post is going to be very relevant to more than just navel gazers and lawyers.

Here goes.

Matthew McKee over at China Tax Insights did a post, entitled, "What is an International Tax Lawyer?" His post was actually a riff on a post I did about a year ago where I stated the following about international tax:

Nobody should dabble in international tax. It is hugely complicated, and should be handled only by attorneys and accountants who specialize in it. Incredibly few do. Gary Tober here in Seattle is one who does and he has a great reputation. All of this is a preface for the fact that a reader just emailed me a copy of an article on the US-China tax treaty and asked me if “this guy Tober knows what he is talking about.” I wrote back, saying “yes” and I am now linking over to this article, entitled, “US Taxation of a Foreign Person’s US Activities and Income Tax Treaty Between the People’s Republic of China and the United States.”

Go ahead and read this, but do NOT act without first hunting down and consulting with a legitimate international tax lawyer or international tax accountant familiar with the tax laws of your home country and China and the interaction between those laws.

I am always amazed when lay people think they can do what I do but I am always even more amazed when lay people think they can do what other lawyers do even though I know that despite all of my training and experience, I would not do those things even if paid.

Matthew, who is himself an international tax lawyer, then says he agrees with what I said above. Matthew then complains of a comment left on my post that seems to say that I should have been talking about "tax specialists" who focus on off-shore trusts.

Matthew then provides an excellent definition of what constitutes international tax, which only slightly modified, also defines what I see as constituting international law:

In defining the concept of international tax, I can't go past Michael Graetz (probably the foremost expert on international tax policy) who said that the ‘basic task of international tax rules is to resolve the competing claims of residence and source nations’. [1] Accordingly, international tax laws are those rules that delineate a country’s taxation of cross jurisdictional income. This includes transfer pricing provisions, thin capitalisation issues, tax residency questions, income source etc.

Accordingly, I consider an international tax lawyer to be a lawyer who regularly gives advice on such rules. Whether that lawyer is an expert in another country’s tax laws is not relevant. Just as with international trade lawyers, who don't have a detailed understanding of the trade rules of each country, international tax lawyers don't know the tax rules of each country back to front. However, international tax rules, as with trade laws, are sufficiently similar that, for example, a US tax lawyer with expertise in international tax (a US international tax lawyer) will know what the issues will be and know when such issues are sufficiently complex such that questions need to be asked from appropriate professionals in other jurisdictions. That is, ultimately, all one can ask.

I love it. I particularly love it because a few weeks ago, I was asked by a client whether my law firm was the right firm for a particular task and it took me some thought and some discussion in the firm to decide that we were not. More on that decision and how it relates to this post in a minute.

Matthew then talks about how the bulk of his business involves cross-border business and the tax issues spawned from that and how he rarely gives advice on off-shore trusts. He then talks about where accounting principles (raised in the comment Matthew did not like) fit in with international tax law:

Further, given that the client [the one who sent me the China-US tax treaty article] was referring to an article on the US-China DTA, I can't see how the interaction between two sets of accounting principles was the relevant the issue. Before we worry about accounting principles, which assist in determining the requisite amount of taxable income, the first issue is to establish liability. In terms of Chinese investing in the US, the first point to start is to look at both the domestic tax laws of the respective countries to determine how they treat the income and then to look to the DTA to see whether it alters the standard position. In many cases, the DTA will prevent one country from exercising its taxing rights over certain income. Domestic tax specialists have little experience in interpreting international tax provisions of domestic tax laws and DTAs hence why Dan was right to discuss tax lawyers with experience in international tax issues. Once it is established that there is liability for taxation in the US for a Chinese company, then the issue of the interaction between accounting principles will become relevant.

I like Matthew's definitions because they so much apply to how I see what my firm does and does not do. However, rather than give an overarching definition, I will give examples.

1. US domestic family lawyer calls us because he needs proof of a divorce from Perm, Russia. Our in-house Russian licensed lawyer uses her Russian lawyer network to certified court documents proving the divorce. She then does a declaration in English for the US Court, explaining how she obtained the documents, what they say, and why they matter.

2. Long-time Eastern European client gets sued for divorce in the United States and comes to me and tells me to handle it. I know little to nothing about divorce law and so I bring in a top US divorce attorney to handle the US side and my client gets an Eastern European divorce lawyer to handle the Eastern European side. I formulate the idea of moving the US Court to move the entire divorce proceedings to Eastern Europe and then assist the US divorce attorney in drafting the motion, which motion is granted by the US court.

3. Someone calls me to help them with their estate planning involving properties in China and in the United States. I refer them to an estate planning lawyer with experience in international estate planning.

4. Client asks my firm to draft terms and conditions for their internet product sales. This company will be selling product all over the world, but not in massive quantities. We talk about how we can draft separate terms and conditions tailored for the top twenty or so companies in which it sells products and how to do that, we will need to bring in lawyers from each of those twenty countries. We also talk about how my firm can draft one set of terms and conditions to apply everywhere. Because these terms and conditions are not country specific, some of them may be invalid in some places. Client chooses the one set for all countries approach.

5. Client is owed money by a Japanese company. My firm has a lot of experience with Japan and with Japanese lawyers and two of our own attorneys speak Japanese. We take on the case for the American company and hire appropriate Japanese counsel to pursue the case. We work with the Japanese lawyers on the case until settlement.

6. Company calls us to assist in collecting on money owed by a company in Egypt. Because my firm has no meaningful experience with either the Egyptian legal system or with Egyptian lawyers, we decline the case. As a favor, however, we tap our network of international attorneys and give them the names of Egyptian attorneys who were recommended to us.

7. Company asks us to assist them with their software licensing agreements in Russia. This is the tough one I mentioned above. I think long and hard on this one because we have substantial experience in drafting contracts with Russia, we have in-house Russian law expertise, and we have done many software licensing agreements. In the end, however, I decline the work because software licensing agreements are so country specific and we are not expert in Russian law relating to software licensing. This company has its own in-house lawyer and I figured he could oversee the Russian lawyers himself, without need for us. If this company did not have its own in-house lawyer, I probably would have suggested we handle the US side for it.

8. Client calls wanting our help on a technology licensing agreement with an Indian company. My firm has done probably hundreds of international technology licensing agreements, but since we have no expertise with India, I refer it out.

9. Client calls wanting our help with a product sales agreement involving the purchase of product from India. We handle it.

10. Client calls wanting our help on a technology licensing agreement with a Spanish company. We handle it because we have a Spanish licensed attorney to help on the Spanish side.

11. Client calls wanting our help in reorganizing its ten international companies, seven of which are in countries we know well, and three are in countries we know less well. We take it on.

I could go on and on but the reality is that many of international law projects can be staffed with anywhere from one to hundreds of attorneys and the staffing will often depend on the money at stake. If someone were selling a $200,000 piece of equipment to Russia, my firm would handle it with an international lawyer and our in-house Russian lawyer. But if it were a ten year agreement to sell $100 million worth of equipment to Russia, we would urge the client to pay for us to bring in a top flight Moscow lawyer to handle the Russian side and to work with us on the international side.

I would guess Matthew does a similar analysis on tax matters.

So then what does it take to be an international lawyer? I am constantly getting asked this question by law students and young lawyers and so here goes.

First off, if you have not already done so, I strongly urge you to go read, "Wanna Be A China Lawyer? Creeps Need Not Apply." That post sets out what my firm typically looks for in terms of personality and background and I do not think we differ all that much from most firms. This post though will address more what it takes for young lawyers to take their practice international.

Young lawyers at other firms often complain to me of how their firm does not put young lawyers on international deals or on international litigation or arbitration matters, expecting me to commiserate with them. I don't. I instead tell them how international deals and dispute resolution are, at their core, pretty much the same as domestic deals and dispute resolution and that it does make sense to first master the domestic side. International law involves pretty much the same issues as domestic law, with a whole bunch of additional issues in addition. Those additional issues can involve the very different laws or culture of a country involved in the deal or the dispute or they can involve issues that arise simply because the matter implicates more than one country. But the first and most basic thing one needs for practicing international law effectively is a good grounding in the practice of law and the best and fastest way to get that grounding is to start out on domestic matters. Sorry.

So what do you think?

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Every so often a US start-up company will contact me with a plan to manufacture in China that involves the Chinese manufacturer producing at a reduced rate until the product can really get off the ground. My response to those plans is always the same:

I am not going to tell you that what you are proposing is impossible, because for all I know, it may be possible. But I am going to tell you that I have never heard of a Chinese manufacturer agreeing to such an arrangement with a start-up company and based on what I know of how Chinese manufacturers are structured and how they typically conduct their business, I think what you are proposing will be exceedingly difficult to achieve. Maybe Wal-Mart could pull something like that off, but I just don't see a small company being able to do so.

The start-up company usually responds either by backing down or by launching into US company speak something like the following:

We have gotten where we are right now through a series of win-win cooperative relationships with a number of companies and people and I don't see why we can't do something similar in China. Maybe this sort of thing is not yet typical in China, but once they see our product and realize how they can participate in it in a win-win sort of relationship, I think they will be interested.

To which, I usually tell them they should try and then when their relationship with their Chinese manufacturer is ready to be formalized with a contract, they should get back to me. They agree, but guess what? I've yet to get the return call.

China product quality guru Rene Anjoran, in his most recent post, "Partnering with a Chinese factory: a sweet dream?" explains how Chinese factories just do not think in terms of either "partnerships" or "win-win" and a lot of that has to do with their past treatment by Western buyers. Anjoran concludes his post (and I urge you to go there and read the whole thing), with the following list of ways to treat your Chinese manufacturer:

-- Accompany the factory at the beginning of the relationship, to explain clearly what is acceptable. -- Keep monitoring production quality, make sure to get written and signed records, and do not lower your standards for any reason (if possible). -- Dump regularly the worst factories: those that can’t (or won’t) be reliable enough, and those that are growing too fast. -- Give regular business to the best factories and walk your talk, as mentioned above. Make sure you are not seen as a bad customer. --Tolerate that the best factories get a reasonable premium on their prices: you will make it back easily on lower costs (better quality, less delays, faster responses, etc. all reduce your costs and help you please your customers). -- Don’t switch suppliers for a few pennies, but keep them in competition with at least another factory to avoid unreasonable quotations.

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I know some countries will not allow entry to people whose passports are within six months of expiring. I know this because it once happened to me, but I cannot remember whether it was Korea or China, or maybe some place else. It was no big deal at the time because I learned of the six month rule before I left the United States and I was able to renew my passport in plenty of time.

Today though I was checking to see if China has the six month rule and my Google search first led me to this excellent and fairly comprehensive US State Department site on travel to China. This site is chock full of all sorts of good information on China, ranging from locations of consulates, to visa requirements, to what to do if you are a victim of crime. I am not surprised by this as US government websites are often terrific first stops for these (and many other) sorts of things.

Anyway, if you are going to China or even if you are already there, I recommend you spend fifteen minutes reading this page as I am sure it will teach you something important or interesting you did not already know. Oh, and on that six month issue, it directed me to the Chinese Embassy website which states that at least six months must remain.

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Every once in a while, I get an email accusing me of costing Americans their jobs and going on and on about how China is terrible and anyone who has anything to do with China is terrible, presumably including me.

I usually respond by talking about how China is a reality and how countries should be judged not only on where they are now, but also on where they came from and where they are going, and on how under those criteria, there are plenty of countries far far worse with whom the United States deals every day. I will then usually link over to the most recent story of US ally Saudi Arabia executing a juvenile or someone who has been raped or converted from Islam or to an article of how US ally Egypt turns a blind eye to the slaughtering of Coptic Christians and then ask the person what they purpose "we" should do about those sorts of things. And what about US allies that do not allow women to vote or drive cars and in which homosexuality is a capital offense? Or the Sudan, which is engaged in genocide, or something very close to that. Why are we not more focused on those countries? Is it racism? Is it that we don't care? Is it strategic interest? Is it too controversial? Is it that we believe change is not possible? What?

I then talk about how as an unabashedly patriotic American I believe it to be in my country's best interest to seek to make common cause with those countries whose values do not include wanting to kill all Americans.

George Gilder says something roughly similar in the Wall Street Journal, in an opinion piece entitled, "Why Antagonize China?:"

While attempting to appease a long list of utterly unappeasable foes—Iran, North Korea, Hamas, Hezbollah, and even Hugo Chávez—today the U.S. treats China, perhaps our most crucial economic partner, as an adversary because it defies us on global warming, dollar devaluation, and Internet policy.

* * * *

Meanwhile, Secretary of State Hillary Clinton and the president's friends at Google are hectoring China on Internet policy. Although commanding twice as many Internet users as we do, China originates fewer viruses and scams than does the U.S. and with Taiwan produces comparable amounts of Internet gear. As an authoritarian regime, it obviously will not be amenable to an open and anonymous net regime. Protecting information on the Internet is a responsibility of U.S. corporations and their security tools, not the State Department.

Gilder goes on to explain why the United States should seek to ally itself with a capitalistic Islamist-fighting China:

A foreign policy of serious people at a time of crisis will recognize that the current Chinese regime is the best we can expect from that country. The Chinese revitalization of Asian capitalism remains the most important positive event in the world in the last 30 years. Not only did it release a billion people from penury and oppression but it transformed China from a communist enemy of the U.S. into a now indispensable capitalist partner. It is ironic that liberals who once welcomed appeasement of the monstrous regime of Mao Zedong now become openly bellicose at various murky incidents of Internet hacking.

Nonetheless, with millions of Islamists on its borders and within them, China is nearly as threatened by radical Islam as we are. China has a huge stake in the global capitalist economy that Islamic terrorists aim to overthrow. And China, like the U.S., is so heavily dependent on Taiwanese manufacturing skills and so intertwined with Taiwan's industry that China's military threat to the island is mostly theater.

Gilder concludes by asking "How many enemies do we need?"

Great question.

What do you think?

UPDATE: Here is a great example (Afghanistan) on how the US, China, and Russia can and should work together against Islamic extremist groups like the Taliban.

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The China Online Marketing Blog recently did an interesting five part series of posts discussing the various methods of making online payments in China. Even three years ago, these payment were barely being used at all and though their usage is nowhere near the levels in places like Korea or the United States, they are increasing at an incredible pace. Part 1 on Alipay is here, part 2 on Tenpay is here, Part 3 on online bank transfers is here, Part 4 on credit card payments is here, and part 5 on China Mobile payments is here.

If you are running an online business that takes payment from/in China, I recommend you check out this series.

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I never wrote about Tengzhong's purchase of Hummer because I was absolutely certain that deal would never go through. It just never made any sense to me and I thought Tengzhong was playing it up for publicity purposes and that the Chinese government would never give its approval. It is now looking like the Hummer deal may actually go through, in which case my mistake was in not writing about it until now.

So in an effort not to make the mistake of overestimating the international acumen of a Chinese company yet again, I am going to get way out in front of a Chinese company purchase that makes even less sense to me than that of Hummer. A Beijing-based company just purchased a "dormant" shopping mall in Milwaukee. Wisconsin, that is.

I know about this only because I have a "Google alert" set for co-blogger Steve Dickinson and it just popped up. Seems CNN sees Steve as an expert on US shopping malls and that actually is not all that off base. Steve always likes to say that he was the lawyer on the two largest Asian (Japanese) real estate purchases in the history of the Pacific Northwest and also the lawyer on the two largest Asian (Japanese) workouts in the history of the Pacific Northwest.

The article is written by Lara Farrar, a really top flight China based journalist, and it is entitled, "Coming to Milwaukee: A Chinese mega-mall?" Here are the basic facts:

A Beijing-based company will soon open a Chinese-style mega shopping mall in the most unlikely of places: Milwaukee, Wisconsin.

"The cost of doing business there is very low," said Wu Li, president of Toward Group. "The people are friendly, the environment is peaceful and the pace of living is slow. It is a good place for Chinese enterprises to go abroad."

Loaded with cash, credit and encouraged by the government to expand overseas, Chinese companies have been investing in property abroad at an increasingly rapid clip. While most are purchasing properties in traditional commercials centers like New York, few have ventured into the Rust Belt -- until now.

Steve is underwhelmed:

The Japanese also famously purchased U.S. commercial properties -- such as New York's Rockefeller Center and Pebble Beach Golf Course in California -- while its economy was on the rise.

"Did any of them turn out well?" said Steven Dickinson, a China-based lawyer with Harris & Moure, an international business firm. "No, they turned out badly. Because the Japanese were idiots? No. It just didn't work out. What does that suggest for the Chinese? Well, I won't say, but that has been the history."

Dickinson advised Japanese firms that bought a spate of American "trophy malls" in the late 1980's, a period when a strong yen and growing global influence encouraged the country to invest overseas, particularly in an overvalued U.S. commercial property market.

"You go into a place like Milwaukee, and you have a country that has no clue what people in Milwaukee want in a mall and when they buy it the first thing they do is change it to run like a Japanese mall or a Korean mall or a Chinese mall," Dickinson said. "Well nobody wants to go and then they bail." A Chinese mall is exactly what Wu [Toward's President] envisions for Milwaukee.

The Mall will be called the AmAsia Plaza and Toward is "recruiting retailers from Beijing and Ningbo, a seaport in northeastern China that is also Milwaukee's sister city," to fill it. The plan is to us the mall to boost the image of Chinese brands in the United States:

Two potential candidates include Beijing Wu Yu Tai Tea Company Ltd. and Tong Sheng He, a shoe shop. The goal, he [Wu] says, is to help Chinese brands boost their image in America while enabling American businesses to connect directly with Chinese wholesalers without having to go through a middleman.

"It is only a matter of time for the U.S. to recognize Chinese products are high quality," he said. "[The mall] will represent the highest levels of Chinese manufacturing."

AmAsia will also feature exhibitions to "show off the rich culture of China."
"One month there will be Chinese painting, another month Peking Opera or traditional dance from Yunnan province," Wu said. "Our hope is that it will become a tourist destination for local and regional communities."

That all sounds great, except I have one problem. Who from Milwaukee is going to go there? It seems Milwaukeeans are wondering about the same thing:

But will Milwaukeeans want to go there?

"Most things made in China, if it is edible or made out of material, people won't buy around here anymore," said Joe Fall, owner of Culver's, a burger joint a few miles away from the shopping center.

"All of the scandals that have erupted through lax manufacturing ... when I hear made in China, I think twice," he said

Wu from the Toward Group, believes "It is only a matter of time for the U.S. to recognize Chinese products are high quality."

What do you think? Is China retail really ready for Milwaukee? Is Milwaukee really ready for China retail?

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I am a fanatical about abiding by the laws in whatever country I am in, not because I necessarily like the laws, but because I do not want to go to jail. I do not know whether we Americans are more arrogant about our own country's reach than those from other countries (though I suspect that we are), but there do seem to be far too many Americans who mistakenly believe some or all (or at least some variation) of the following:

1. If it's legal in the United States, it's legal everywhere;
2. If the United States goes easy on it (marijuana possession, for instance), every other country also goes easy on it, or at least will go easy on it when it is an American involved;
3. If it is legal in the United States and illegal somewhere else, well then surely that somewhere else is acting silly and will come to its senses when a good American lawyer explains to them how things should be;
4. And, if worse comes to worse, and an American commits a crime overseas, the US government will fly them home to mommy and daddy.

None of the above are usually true, though in some cases if you are accused or convicted of a crime overseas, you might be able to get your local newspaper to write an absurd editorial or, if you are extremely wealthy, you might be able to get Senator Patty Murray to write a letter to President Obama asking him to "raise the issue" of your detention. In other words, if you are charged with a crime overseas, you are pretty much on your own....even if you are an American. [FULL DISCLOSURE: My law firm is involved in two law suits against Global Fishing, the owner of which on whose behalf Senator Murray felt "called upon" to intervene, including this one for $5.8 million, plus interest.]

That was in stark evidence today as a Haitian judge ruled that ten Americans who went to Haiti and allegedly scooped up a bunch of Haitian children and drove with them to the Dominican Republic border. The media are saying that many of the kids were not orphans and that the ten Americans had no legal basis for taking the kids or for trying to cross the border with them.

For more on the criminal side of living and doing business in China, check out the following:

-- "Avoiding Chinese Jails. I'm Talkin' To You." (this post contains a whole host of great tips for making sure you stay on the right side of the law in China)
-- "Amazing Lawyers and The Criminal Side of China Business"
-- "Criminal Law and Business in China -- A Strong Caution"
-- "Foreign Partners In China Crime Do The Time"
-- "Bad China Products. Hey It's A Criminal Thing"
--"Bad China Products. Hey, It's A Criminal Thing, Part II"

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Did a post recently, entitled,"How To Speak Through A Chinese Interpreter," setting out ten things that will improve your speaking through a Chinese interpreter. That post led to a number of comments, including one that really kinda ticked me off. And I almost never get ticked off.

The comment that really bugged me was from "Glen," who had this to say:

Hire professionally-trained interpreters and translators.

Using people from "around the office" for formal translation and interpretation tasks is unprofessional for a law firm or any business. Would you ask Jeff from accounting to fix an electrical problem? No. Hire a professional every time.

I would wager that the interpretation mistakes that your colleagues are hearing in depositions are due to the fact that the interpreter has not been trained professionally. If you use professionals, items 1 through 10 on this list are completely unnecessary.

Glen has it all wrong, but instead of simply getting all up in Glen's face (as was my first inclination), I am going to use his misstatements to expound on how to go about choosing the right interpreter. I do not purport to be an expert in interpretation, having never interpreted much more than a lunch order, but I have done so much through interpreters that I do consider myself expert in selecting them and using them.

And, contrary to what Glen seems to be saying, my method definitely involves a lot more than just pulling someone "around the office."

Glen's argument for always using a professional interpreter is both widely impractical and, at least in some instances, flat our wrong.

I choose the interpreter to suit the situation.

Sometimes the situations involves a potential client coming to my office. There it makes sense to use someone in-house who knows my firm and, most importantly, who I know will make a good impression.

Sometimes the situation requires someone who knows and understands the matter to be discussed. This will almost always again mean someone in-house because that someone will probably have been working on the matter all along. And even if that person has not been working on the matter all along, that person has probably worked on similar matters and, if not, I at least know that person has an excellent understanding of legal issues. Even most good interpreters are not good at all in dealing with complicated legal matters.

Glenn seems to fault me for using bad interpreters at depositions and he conflates that with my having used someone from around my office. I only wish. Without exception, the bad interpreters at depositions have been chosen by the other side in circumstances where I had no say. And the reason I know the interpretations were bad is because for all but the most unimportant deposition, we try to bring along someone from our office (or the client) to monitor the interpreter. We are not allowed to use our own people to interpret at depositions. The same holds true in court.

When it comes to an important, planned gathering of a large number of people, we typically bring in a professional interpreter from outside our firm, but we again bring along our own people to monitor. The reality is that great interpretation is always desirable, but having your own person there who you trust completely and you know will be looking out for your own interests can be essential.

The personality of the interpreter can also be crucial. Many will view you as they view the interpreter and if your interpreter is arrogant and off-putting, do not be surprised if you are seen the same way. Many years ago, I was involved in a big case on Sakhalin Island and I was using interpreters when I landed. All were fine, but at some point, I used one who caused an influx of compliments about my firm and me. It was apparent that everyone (both the Americans and the Russians) really liked this person and were hugely impressed by her professionalism and her language skills. I immediately doubled her wages in return for her promising to drop everything and take on my matter whenever I was in town.

And in China, if you are going to be using an interpreter for contract negotiation, you had better find someone who you not only trust, but also find someone who will not back down when confronted by the Chinese company with which you are negotiating.

Which, for some reason, reminds me of one of my favorite tricks. Try going into a negotiation with someone who the other side would never think speaks their language and never tell the other side that you have that language capability. You might be surprised at what you learn when the other side starts speaking in their language, assuming you do not understand a word of it.

Your interpreter is you, so choose wisely.

How do you choose your interpreter?

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I have an almost Raymond Babbitt like attraction to numbers. Not kidding. Lists. Love them. Numbered lists. Love them even more. I see numbers in my head. I never liked math, but I love numbers. When I was a kid, my older brother would quiz me for hours on the most obscure statistics on every major league baseball player. Damn I was good.

This and only this (well and the fact that China Law Blog made the list) are the only explanations I have for referring to this list of the 50 best blogs on China.

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Every so often I get an absolutely terrific newsletter from the The Mintz Group, which bills itself as follows:

The Mintz Group is an investigative services firm that gathers hidden business facts all over the world for corporations, law firms, financial institutions and non-profits. We connect the dots by finding the critical facts our clients need before relationships. Before relationships, including business deals and executive hires, we conduct due diligence investigations into the backgrounds and reputations of companies and their executives. During disputes we find admissible evidence that law firms and in-house counsel need to prevail, whether in court or at the negotiating table. After frauds, we connect the dots by finding out what happened, how it happened and who did it.

I am not sure how I got on their mailing list, but unlike virtually every newsletter I get, I have not canceled this one because it is just too good. This issue is no exception, as it contains an excellent article, entitled, “Beyond Madoff: Eight Lessons from Recent Due-Diligence Background-Checking Gone Wrong,” setting forth the following eight (how luck!?) due diligence "lessons," each of which I explain in relation to China.

1. Before giving someone your money, you need to dig into his background even if he:
(a) is a member of your country club;
(b) has a friend on the police force; or
(c) was profiled in a glossy magazine. For China, I would change (a) to "the Communist Part" and I would change (b) to friend of the mayor and then I would state that these things not only do not militate against the need to conduct your due diligence, they increase that need.

2. The further away from home you travel, the deeper you should investigate the prospective relationships you find there. China is very far away and that should definitely be taken into consideration.

3. Relying on only checking references can give you false comfort about the person.
True everywhere, including China.

4. If you fail to check for fraud convictions and fake names in a partner’s past, you might be in for wrong-doing in the future – leopards generally don’t change their spots.
Leopards don't change their spots in China either.

5. Some raves offered by prior employers continue old entanglements. Past employers often do not know of their ex-employees history before joining the company or they pass on a good review just to decrease the likelihood of their ex-employee messing with them.

6. Don’t be bashful about doing a due diligence check of a prospective hire or business partner; be suspicious if he or she seems offended that you’re doing one.
Completely true. We find that the honest and legitimate businesses expect caution on our part and respond to our reasonable requests for more information. The disreputable claim the documents do not exist or that we do not know what we are talking about or that this just is not how "it" is done in China.

7. Fake due diligence can be worse than no due diligence at all. This is doubly true for China, where fake documents are so often employed.

8. Don’t be naïve – many people with things to cover up in their pasts lie when asked about themselves. Completely true.

For more on the need to conduct due diligence on your China partners, check out the following:

-- Let Me Tell You About China Due Diligence
-- Korea, Fake Degrees, Confucius, Due Diligence, And China Too

-- Beware The Potemkin Chinese Company
-- Floating Houses, Conflicting Laws, And Really Nice Governmental Officials. China Law Practice Writ Large.

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My business requires I spend huge amounts of time speaking with others through an interpreter. I have actually gotten pretty good at using really good interpreters to hide my own flaws. Within my office, we have people capable of translating/interpreting English, French, Korean, Chinese, Russian, Japanese, Sanskrit (never used), German, Spanish, and even a bit of Turkish.

I have been working with my firm's Russian specialist for about a decade and though I speak enough Russian to tell a (as in one) joke and to order a couple of beers and make a compliment or two, for everything other than that, I rely on Oksana. Oksana knows the law, is articulate in both English and Russian, and fully understands both American and Russian culture. When speaking with Russians through Oksana, I hardly worry about what I say as Oksana will "clean" it up with her transmittal. But what I still always find funny is how much Oksana always reduces what I say. If I give a long explanation as to why I think our argument will prevail, Oksana just might translate me as having said, "I think we will win." She insists Russian clients want answers not explanations.

When talking with Russians I love using sayings, particularly those relating to hunting. Whether there is a corresponding one in Russian (amazingly enough, there usually is) or not, the Russians always seem to understand and appreciate them. "We are going to have to kill a few coyotes before we can even start thinking about slaying the bears."

Our German clients are very different, or so I am always being told by our German (and Spain) licensed lawyer, Nadja Vietz. When meeting with our German or Austrian clients, I will say a short sentence and then five minutes later Nadja will be done. I might say something like, "we need to really pound on this guys" and Nadja will then give a long explanation in German as to why, based on our past experiences and the existing law, the appropriate strategy is that we pursue our claim with vigor. Our German and Austrian clients tend to want huge amounts of detail as to what we have done and will do.

No matter what the language, there are certain best practices to use when speaking through an interpreter and there are also certain particular practices that make sense when speaking into particular languages or to those of a particular culture. I thought of all this today when I came across an article, entitled, "Translating from English to Chinese" (h/t ChinaHopeLive). This article provides the following ten tips for those speaking in English to a Chinese audience, through an interpreter:

1. DON’T say have fun. The phrase “having fun” or any other derivative of it, “have fun” “had fun”, does not translate into Chinese. Culturally, it’s simply not a concept that resonates with Chinese people. It’s not that Chinese people don’t enjoy a good time, it’s that they don’t value fun as much as an English speaker might.

2. DO speak in complete sentences. Grammar structures vary between the two languages therefore sometimes you have to flip flop a sentence around in order for it to make sense. Consider the sentence: Smoking in the elevator is prohibited. In Chinese, I’d have to translate “prohibit smoking in the elevator” for it to make sense. Go ahead and say the complete sentence so the translator can have the freedom to rearrange the structure before delivering the message.

3. DON’T use names, places, or any other words that require capitalization unless you can be certain they are something/place that is well known across both cultures. I know the Chinese name for Abraham Lincoln, but not Boise, Idaho.

4. DO stay within normal parameters of the English grammar and avoid slang. Play on words is fun when you’re speaking to other native speakers, but they do not translate well. For example: “The biggest mistake of my life was hooking up with that girl.” I can translate the meaning, that you had a relationship with this girl, but I won’t be able to convey whatever sentiment behind the usage of the phrase “hooking up” very well.

6. DON’T use sarcasm. Sarcastic humor is largely a western phenomenon. Chinese people for the most part can’t appreciate sarcasm and will take what you say literally which may easily result in offense.

7. Do tell light hearted anecdotes of human experiences which transcends both cultures. Tell stories that you know Chinese people can relate to. For example, everyone can relate to silly antics of toddlers. This will lessen the pain of listening to a translation and immediately build a connection.

8. DON’T use idioms. There are a handful of idioms that are in both English and Chinese, but unless you are extremely well read in both languages, you’re not going to know which ones they are. Instead, try conveying the meaning of the idiom you’d like to use. It may be less interesting, but what’s the point of being interesting if the audience won’t even understand the meaning?

9. DO pay attention to basic respect and civility in your words. It is very hard for me to translate for somebody who is saying something degrading about Chinese culture. The things in Chinese culture that irritates most likely will not irritate the Chinese, so a message about the discomfort of crowds will not translate well, and is simply disrespectful.

10. DON’T use affectionate words too much. Chinese people express love much differently than Westerners. I can only translate “I love you, God loves you, I love my Mom” so many times into Chinese before it starts making me squirm before my Chinese audience.

Oh, and speak slowly.

What do you think?

UPDATE: Stan Abrams over at China Hearsay did his own post on this topic, entitled, "Speaking Through an Interpreter: Try to Avoid Lawyers," positing that lawyers make lousy interpreters. Stan may be right about this, but one thing I have found is that just about everyone makes a lousy interpreter. With rare exceptions, whenever my firm deposes someone in a foreign language we bring someone from the office who is fluent in that language so as to monitor the translation of the interpreter. This has given me countless stories of interpreter mistakes.

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With sushi restaurants, it's the yellow fin.
With new houses, it's the windows.
With international contracts, it's the dispute resolution provision.

The "it" I am talking about is the one easiest, fastest, most accurate, way to judge whether something is good or not. And the way I judge international contracts is by heading straight to the dispute resolution provision. The well crafted provision is, above all else unambiguous. If it calls for litigation, it says where it will be and what law will apply. And it says who will pay for it and under what circumstances. If it calls for arbitration, it says where it will be, how many arbitrators will be required, how the arbitrators will be chosen, the language of the proceedings, and the law that will apply. And it says who will pay for what.

The above are minimums.

I am heartened to see I am not the only blogger obsessed by these provisions. My friend, Santiago Cueto, of International Business Law Advisor, recently did his own post on international dispute resolution clauses, entitled, "7 Ways to Bulletproof Your International Arbitration Agreement."

Santiago starts out by setting forth some very sound reasons as to why arbitration usually makes sense in international contracts:

As an international business attorney, a focal point of my practice involves advising clients how to best handle cross-border disputes. The most effective mechanism by far in resolving international dispute is international arbitration. Why? International arbitration levels the playing field by taking away the home court advantage of parties on either side of a transaction.

But the most attractive aspect of arbitration is that the awards issued by an international arbitration tribunal will receive worldwide recognition by countries that are members of one of the international conventions on the enforcement of tribunal awards.

I would add, however, that in dealing with China, there are definitely times where litigation may be preferable to arbitration. In particular, if we see in-China IP or trade secret violations as being the the biggest threat to our client, we oftentimes choose a Chinese court as the forum for dispute resolution. Also, there are times where you want to make dispute resolution as difficult, as expensive, and as drawn out as possible so as to dissuade your counterpart from ever engaging in it. In those instances also, arbitration may not make sense.

Santiago then sets out a nice checklist on how to "bullet-proof" an arbitration clause:

1. Be Unambiguous. Unequivocally state that any dispute will be resolved through arbitration e.g. “Any dispute or difference arising out of or relating to this agreement shall be finally resolved by arbitration …”

2. Be Clear. Define whether arbitration is to be preceded by negotiation or mediation and designate a time frame e.g. “If no agreement has been reached within __ days of the delivery of written notice of the existence of a dispute, either party may serve a request for arbitration …”.

3. Be Specific. Specify the administering institution and the rules to be applied e.g. “The arbitration shall be administered by the International Center for Dispute Resolution in accordance with its International Arbitration Rules.

4. Be Careful. Carefully select the site of the arbitration taking into consideration the quality of its arbitration jurisprudence and the respect of its courts for the arbitral process. e.g. China, no. Hong Kong, yes.

5. Be Meticulous. Meticulously set forth the number of arbitrators on the panel and how they will be selected. Choose an arbitrator who demonstrates communicative proficiency, a firm appreciation of the rules of evidence and an acknowledged expertise in the industry in which the dispute arose or about the issues in dispute.

6. Be Heard. Designate the language of the proceeding. It is unsettling how many times parties overlook this provision and are forced to rely on a foreign translator to communicate every word of the proceeding.

7. Be Final. In order to prevent further review and appeals of an arbitral award once it is rendered, you must include a statement in the arbitration agreement that clearly states that the award is final e.g. “The arbitral award is binding, final, not subject to review, and not subject to appeal by the courts in any jurisdiction." This provision is particularly essential in jurisdictions where the laws allow parties to appeal an award issued in that country.

I disagree with Santiago's stating "China, no" as there will definitely be times when you have no choice but to say yes to China arbitration. In those situations, you should call for the language of the arbitration to be in English and you should require that as many of the arbitrators as possible come from outside China. If you have an English arbitrator and your arbitration is in English, applying the laws of England, it hardly matters that it may be taking place in Shanghai under CIETAC and not in Hong Kong.

Bottom Line: Arbitration provisions often end up being the most important provision in your contract so give them the strategic thought and consideration they deserve.

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Really excellent post up at the just discovered (by me) Switchboard blog. This blog is put out by the NRDC (Natural Resources Defense Council) and the post is entitled, "China Renews Its Commitment to Renewable Energy." The post is written by Sara Schuman, a "visiting attorney" in the NRDC's Beijing Office. The post discusses what it sees as two "significant changes" to China's Renewable Energy Law brought about by the December 26, 2009, amendments to that law: "(1) the addition of measures intended to better implement the Mandatory Connection Policy and (2) the streamlining of the renewable energy fund that provides the financial incentives for the renewable energy industry."

I recommend Ms. Schumans' post for anyone with an interest in China's Renewable Energy Law.

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Spoke with a client today regarding IP protection in China. I gave my usual speech on China's protection of intellectual property, which, very briefly summarized, goes something like this::

IP protection in China is admittedly not that great, but it is better than widely portrayed. If you are selling movies on DVD or software on CD, then it is every bit as bad as you have no doubt heard. If you want to register and then enforce your patent there, do not expect your protections to be as good as the United States. But one thing we should very seriously talk about is how we can help protect your technology in China through trade secret/confidentiality agreements and through trademarks, both of which have a pretty good record of being enforced in China.

My client then said he has heard the Chinese courts never enforce patents held by foreigners. I told him that though patents are definitely not as strong in China as in the United States, the idea that foreigners can never protect their patents in China is just not true. A few hours later, an article, entitled, British victory in China as patents dispute boils over showed up in my email box.

The gist of the article is in its first sentence: "The British company whose founder invented the kettles that switch off automatically when they boil has had China patents win." The British company is Strix, whose founder John Taylor, invented the "kettle control" and who, today, makes most of its products in Guangzhou, China. Strix learned that two Chinese companies were copying its China patented technology and it sued those companies and was just awarded USD $1.5 million against them by the Beijing No. 1 Intermediate People's Court. Of equal importance is that the Court froze defendants' "liquid assets, including the bank accounts" at the commencement of the lawsuit a year ago, pretty much ensuring Strix will be able to collect its judgment.

So next time someone says China never enforces patent rights held by foreigners, you tell them that cannot be true.

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Just because you’re paranoid doesn’t mean they’re not out to get you!

I am convinced about 99.9% of all emails go through. But the way I interpret that is that at least one email I send per day will not reach its destination. If I do not hear back from someone rather quickly, I just assume they did not get my email and so I send it again. In other words, I assume the worst.

I have a similar attitude regarding my privacy when in China and many other countries. I assume my hotel room is bugged and my internet is monitored. I assume the worst and I take every measure I can to be careful. I know people will (and have) laugh at my "paranoia" but I have plenty of stories to tell involving people who were not careful about their data.

1. Many years ago, I was staying on the business floor of the Hotel Lotte in Pusan, Korea. This floor has a couple of computers for its guests. I got on one of those computers (to read the news) and the first thing that popped up was a letter written by a Seattle company revealing information I know they would not have wanted me to see.Someone from this company had written this letter on the computer (in Word format) and simply left it there. Not smart.

2. Many times I have gotten on the internet at an airport computer and been let right into someone's web-mail account. Not smart.

3. A couple of years ago, I found a memory stick in the desk drawer of my hotel in Shanghai that contained an incredible amount of information on a European plastics company. Not smart.

3. A stockbroker I know was sent an email by a rival stockbroker, urging the my stockbroker friend to oppose some proposed law that would strike hard at those with massive net worth. The stockbroker who sent out this email cc'ed it to a half dozen or so of his clients and my friend figured these were people with the requisite massive net worth and he cold called them for their business. He ended up getting a great client with this tactic. Not smart.

4. Many years ago, a client of ours discovered one of its employees was running a rival business within my client's business. My client then arranged for this employee to bring his two company laptops to the office and then when locked out the employee when he went to lunch. You would not even believe the stuff we found on those laptops. I am talking both business and personal. Very, very personal. Not smart.

5. A number of my firm's Russian clients will not discuss anything of any import over the phone or via email. They will only discuss things in my office and, for the even more paranoid, only over at lunch at a restaurant if the matter is of extreme secrecy. They still see themselves operating under the Soviet system, no matter where they are.

I thought of data protection today after reading a fascinating New York Times article, entitled, "Britain Warned Businesses of Threat of Chinese Spying." True or not (and I have no way to know), this article ought to chill you at least a bit. It talks about a 2008 report from Britain's M15 intelligence agency, setting out the following:

Officers from the People’s Liberation Army and the Ministry of Public Security had approached British businesspeople at trade fairs and exhibitions with offers of “gifts” that included cameras and computer memory sticks that were found to contain bugs that provided the Chinese with remote access to the recipients’ computers. "There have been cases where these ‘gifts’ have contained Trojan devices and other types of malware.”

The MI5 report described how China’s computer hacking campaign had attacked British defense, energy, communications and manufacturing companies, as well as public relations companies and international law firms. The document explicitly warned British executives dealing with China against so-called honey trap methods in which it said the Chinese tried to cultivate personal relationships, “often using lavish hospitality and flattery,” either within China or abroad.

“Chinese intelligence services have also been known to exploit vulnerabilities such as sexual relationships and illegal activities to pressurize individuals to cooperate with them,” it warned. “Hotel rooms in major Chinese cities such as Beijing and Shanghai which have been frequented by foreigners are likely to be bugged. Hotel rooms have been searched while the occupants are out of the room.”

I have absolutely no proof that anything like the above has ever happened to me or to anyone else in China, but is anyone out there certain these sorts of things are not happening? How do you handle these issues?

UPDATE: Two more stories. Driving in to work today, I listened to a story on the BBC of how the German will likely pay for illegally mined data from a big Swiss Bank. Germany is thinking it worth it to pay 2.5 million Euros for data that will allow them to catch more than 100 million Euros in tax cheating.

The other story was one of which I was reminded by an old client of mine. Many years ago, I was going to a particular city in a former Communist country and my client and I agreed that, above all else, I should completely avoid meeting with or even talking to "Oleg" [made up name here]. I had to go to this city, but I was going to be there for only two days. I fly in, walk into my hotel lobby and, before I can even check in, two people come up to me and say that Oleg will be coming by to take me to dinner at 7:00 pm. I felt I had to go at that point and when I asked how he knew of my arrival, he said that he gets emailed the list of all foreigners as soon as they arrive. Oleg runs a very successful private business.

FURTHER UPDATE: Someone I know to know China and someone I have every reason to trust, sent me the following email, which I have modified slightly to erase any possibility of anyone being able to trace it back to its source:

Some Chinese companies own their own hotels or have very close relationships with a particular local hotel and contractually require that the foreign parties stay in one of these hotels at a special rate.

Any attempt to arrange different accommodations is met with strict and swift countermeasures. Penalty clauses in the contract are brought up. If you do find other accommodations they will absolutely not pay for them.

Why? All telephone calls are capable of being, and are frequently, recorded. I have actually been in the room used by one of these companies as it's actually not all that difficult to get into.

All of the "photocopies" made at the hotel were scanned digitally and saved. Colleagues would leave their notebooks in the meeting room at lunch, "locked." These notebooks' hard-drives were removed and cloned.

Once, a foreigner locked horns with someone at a big Chinese company and ended up in jail on a prostitution sting. Dan, don't get me wrong, I am against prostitution but this guy was not doing anything any differently from what he (and others) had been doing all along. In this instance the "prostitutes" were in fact not prostitutes. The girl's room was camera'ed out. It is very, very, very rare for someone to be arrested in China for soliciting. This person subsequently got out on greatly reduced charges and I have to believe that was in return for his agreeing to start going along more with the Chinese company.

I will note that I have a very savvy client who absolutely refuses to stay in any hotel recommended by those with whom he does business and who always books his hotels on his own, without revealing where he will be staying. Probably a pretty good policy.

FURTHER FURTHER UPDATE: The Asia Health Care Blog has done a follow-up post, entitled, "China. The walls have ears there, and probably everywhere else," saying I am not paranoid enough and should be paranoid everywhere I am and at all times. My response to that is that I am, but because this is a China blog.....

FURTHER FURTHER FURTHER UPDATE: Reader sent me this link to a pretty recent article, entitled, "Boris Johnson's deputy [Mayo of London]: 'I had sex with a Chinese spy'"

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One of my savviest clients called me a couple weeks ago. This guy is an opportunist. He makes things all around the world. He makes cheap things for which there is an immediate need. He has been doing this unbelievably successfully for around twenty years, all over the world, but lately almost exclusively in China and in Vietnam. He does both OEM manufacturing and manufacturing in his own factories, all depending on the best way to proceed at a particular time, in a particular place, and for a particular product. He studies the world from a manufacturer's perspective and he is constantly crunching the various numbers that determine where to make little cheap things.

Over the years, I have spent hours talking to him about the information he analyzes in determining where to manufacture and the following pretty much covers it:

1. Political stability and risk
2. Labor costs/efficiency
3. Work ethic
4. Infrastructure
5. Material costs
6. Utility costs
7. Logistics
8. Shipping Costs
9. Where Nike manufactures

He was calling me to tell me he was considering Haiti and that I should look into lining up a good attorney there.

Here is his analysis, very very roughly in his own words.

I cannot help but be impressed with the resilience and entrepreneurship of the Haitian people. And look at how well Haitians do when they come to the United States. That tells me that was has held them back has nothing to do with culture. I know Haiti has had massive crime and corruption and even before the earthquake it terrible infrastructure, but look at how close it is to the US and think about its future. I see the US and other countries helping it recover both in terms of its government and its infrastructure. The US is going to put in place all kinds of incentives to encourage American companies to manufacture there. We are going to do this both for Haiti's sake and our own. Let's face it, our relations with China are bad right now. They are bad on both the political and the economic level and we should be doing whatever we can to reduce our dependence on them. And it is not as though things are getting any cheaper in China either. Wages and utility rates just keep rising. I am not saying Haiti is not without its massive problems and risks and I am not saying its recovery will be anything but slow, but I am saying that I am seriously looking at it and you should start lining up a lawyer to help me when the time comes. I believe the US government, if it is smart is going to be looking at helping more US-friendly countries compete with China. I'm willing to be somewhat of the trailblazer in going there as I think it's the right thing to do

And so I did. I contacted a lawyer at my old firm who I knew had done some work in Haiti and he recommended a Haitian lawyer to me but said he had no idea how that lawyer was doing. Then last week, the Martindale-Hubbell Blog did a post on how some of its lawyer customers were doing in Haiti and the recommended lawyer was in the post.

I secured my client's approval to write this post and to the extent I can, I will keep you up to date if and when this project progresses.

So what do you think. Why not Haiti?

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I have the Wall Street Journal, The New York Times, and the Washington Post in my feed-reader, all set to pull up China related articles. For the last couple days, these three sites have had a number of articles relating to the US selling a massive amount of arms to Taiwan and also to the US trying to get China to agree to sanctions on Iran.

The contrast is bizarre. It is as though we are stabbing someone right in the gut, and as that person lays bleeding on the ground, we ask if he might be so kind as to loan us a few bucks.

I mean, if we want China to side with us on Iran, should we not be giving it something in return. Now maybe the Taiwan sales had to have been timed the way that they were, but I for one cannot help but thinking that something is wrong here. Are we just not all that concerned about a murderous bunch of Islamic extremists having a nuclear bomb or do we just have problems prioritizing?

UPDATE: Just saw that Thomas P.M. Barnett, who makes his living writing on and analyzing diplomacy, sees the same incongruity in the timing here that I see. In his post, entitled, "Tin Ear on Taiwan," he notes that "the timing of the arms sales to Taiwan suggests an administration that lacks interagency cohesion."

FURTHER UPDATE: Or maybe the timing was intentional so as to send a very strong message to China. So says the New York Times, in its article, "U.S. Starts to Push Back Against China in Growing Rift:"

While administration officials sounded a uniform public note cautioning Beijing not to allow this latest tiff to damage overall relations, some administration officials suggested privately that the timing of the arms sales and the tougher language on Iran was calculated to send a message to Beijing to avoid assumptions that President Obama would be deferential to China over American security concerns and existing agreements.

“This was a case of making sure that there was no misunderstanding that we will act in our own national security interests,” one senior administration official said. A second Obama administration official, also speaking on condition of anonymity because of the sensitivity of the issue, said pointedly: “Unlike the previous administration, we did not wait until the end of our administration to go ahead with the arms sales to Taiwan. We did it early.”

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Can you read this post by Patrick Chovanec, entitled, "Reference Points on China Real Estate," and still insist China real estate (at least in its biggest wealthiest cities) is not one massive bubble that will have to eventually resoundingly pop?

I couldn't.

UPDATE: I just started a discussion on this topic over at the Linkedin China Law Blog Group.

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