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Category Archives: Basics of China Business Law

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How To Get Legal In China. Now.

Posted in Basics of China Business Law, Legal News

During the past year, the number of calls from American (sometimes European) SMEs pushed out of China for having operated there without a legal entity (such as a WFOE) have doubled? What is causing this increase of foreign companies getting shut down in China?It’s the economy, stupid. As China’s economy tightens, various local governments increase… Continue Reading

China Contracts and the Unknown Counterparty

Posted in Basics of China Business Law, Legal News

Whenever one of our China lawyers drafts an agreement for a client doing business in China, one of the first things we ask is the identity of the Chinese counterparty. It’s a deceptively simple question. The typical Chinese manufacturer (for example) is composed of multiple entities, with complicated lines of ownership. One entity may run… Continue Reading

China’s SaaS Market: WFOEs Need Not Apply

Posted in Basics of China Business Law, Legal News

A major trend in the business software business is provision of software not through installation on a customer’s computer but rather through online access using the Internet. This approach is known as software as a service (SaaS). Though SaaS is a major trend in the U.S. and Europe, SaaS in China by a foreign company… Continue Reading

Foreign Executives in China. Worry Me Yes or Worry Me No?

Posted in Basics of China Business Law, China Business

With the media recently paying so much attention to foreign businesspeople getting in trouble in China, the phones of our firm’s China lawyers have been ringing off the hook from worried Americans based in China. We are getting the following kinds of questions and we are giving the following kinds of short answers (needless to… Continue Reading

China’s Forty Hour Work Week Is Mandatory. Except When It’s Not. Part III.

Posted in Basics of China Business Law, Legal News

In parts one and two of this series, I wrote about the “flexible” working hours system as an exception to China’s standard working hours system. China’s labor law and relevant regulations also provide for a second exception: the “comprehensive” working hours system. The latter system applies to three categories of employees who work longer hours… Continue Reading

Stiffed By Your China Manufacturer? It’s Probably Your Own Fault.

Posted in Basics of China Business Law, Legal News

In the last five years, the China lawyers at my firm have been contacted literally hundreds of times by foreign companies (mostly American, Canadian, British, German and Australian) that have received bad product or no product from their suppliers in China. And no exaggeration, I cannot remember a single time where the foreign company did… Continue Reading

China Commercial Contracts: Writing the Contract Damage Provision

Posted in Basics of China Business Law, Legal News

In our standard commercial contracts we often include a specific damage amount for certain (not all) violations of the contract terms. We work with our clients to ensure that such provisions are not a penalty, but rather an honest assessment of what real damages might result from the breach. This system has worked well in… Continue Reading

China Dispute Resolution Clauses. Choose Certainty Over Flexiblity.

Posted in Basics of China Business Law, Legal News

When my firm’s China lawyers draft a contract concerning China, we nearly always use a simple and clear dispute resolution provision: The contract is governed by Chinese law. Chinese language controls. Disputes will be resolved in China. On the third point, we work with our client to choose either litigation in the PRC courts or… Continue Reading

When To Register Your China Trademark? Ask Tesla.

Posted in Basics of China Business Law, Legal News

Electric car maker Tesla Motors is being sued in China for trademark infringement, in what Reuters calls “a surprise development that casts a shadow over CEO Elon Musk’s ambition to expand rapidly in the world’s biggest auto market.”  The plaintiff is seeking a court order stopping all Tesla sales and marketing activities in China and… Continue Reading

Five Common China Mistakes To Avoid

Posted in Basics of China Business Law, China Business

American companies typically make a lot of mistakes in China. And even when they don’t make mistakes, they get frustrated. Though mistakes and frustration will always be par for the course in China, at least some heartbreak can be avoided by following these five principles: Do not underestimate China’s up-front time commitment. American companies tend to… Continue Reading

China Business. China Law. Go Here For Great Discussions On Both.

Posted in Basics of China Business Law, China Business, Legal News

We started a China Law Blog Group on Linkedin with the goal of creating a spam-free source for China networking, information and discussion. We just today added our 9,000 member.  I am proud of the absolutely terrific discussions we have within our group, both based on the numbers (a number of the discussions have received around 100 comments and… Continue Reading

Four Common (And Somewhat Deadly) China Law Mistakes To Avoid

Posted in Basics of China Business Law

This post highlights four common and somewhat egregious mistakes my law firm’s China lawyers often see American domestic lawyers make when representing their clients in doing business with or in China, along with a very brief analysis of what causes American lawyers to make each sort of mistake. 1. Many years ago, a lawyer in the Midwest… Continue Reading