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Category Archives: Basics of China Business Law

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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

How To Avoid China Corruption Charges

Posted in Basics of China Business Law

It has been about a month since China’s police accused GlaxoSmithKline’s former head of China operations of making  illegal payments to Chinese doctors to boost GSK drug sales. Last fall witnessed the high-profile trial, conviction, and life sentence of Bo Xilai, the former head of the Chongqing Communist Party, on bribery charges. These two cases send a clear… Continue Reading

Foreign Company Corruption In China. If You Have To Ask…

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

Just read a fascinating/spooky article by Reuters Shanghai reporter, Adam Jourdan, entitled, Spooked by probes, pharma executives ask: should I leave China? Here’s our easy answer: if you are worried about getting arrested in China for something that your company has done, you should leave. Now. The article starts out talking of how China’s recent and ongoing… Continue Reading

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

Posted in Basics of China Business Law, Legal News

In China’s Forty Hour Work Week Is Mandatory. Except When It’s Not, I wrote of how China’s labor law permits a flexible working hours system for senior management as an exception to the basic work week rule (it seems most municipalities enforce a 40-hour work week). This system can benefit employers needing greater employee hour flexibility,… Continue Reading

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

Posted in Basics of China Business Law, Legal News

China’s labor law provides for a 44-hour work week, but its regulations provide for a 40 hour work week and most municipalities (it seems) enforce the 40-hour work week, but recognize that this workweek may not be practical for certain employees. A “flexible” working hours system is thus permitted for “senior management” as an exception… Continue Reading

If You Could Have Only Two Clauses in Your China Contract, What Would They Be? Part II.

Posted in Basics of China Business Law, Legal News

In our first post in this two part series, we wrote about the importance of choosing the right language for a U.S. company contract with China. In this post, we talk about why the jurisdiction and forum for any disputes is so critical and how (generally) to go about choosing that. In choosing the jurisdiction… Continue Reading

If You Could Have Only Two Clauses in Your China Contract, What Would They Be?

Posted in Basics of China Business Law, Legal News

Got the idea for this post from contract law expert, Brian Rogers of the Contract Drafting Blog. Brian’s post is entitled If You Could Have Only Two Clauses in Your Contract, Which Would You Choose? Brian analogized the choice of two contract provisions to choosing two tools for a deserted island stay. Brian says that when representing… Continue Reading

China WFOE Formation. The “New” Rules on Minimum Capital.

Posted in Basics of China Business Law, Legal News

In the bad old days (last year), every company in China was required to have a stated registered capital. This amount is provided in the Articles of Association of the company and is also noted on the company register. The registered capital includes all of the components of the initial investment in the company, including… Continue Reading

China Contracts That Work

Posted in Basics of China Business Law, Legal News

There are three rules for making contracts enforceable in China: Make the jurisdiction a China court. Make the governing law Chinese law. Make the governing language Chinese. American companies routinely insist on contract provisions that effectively render their contracts unenforceable in China. By their own efforts, they make their contracts worthless, much to the amusement… Continue Reading

China Trade And OFAC Sanctions. The Basics.

Posted in Basics of China Business Law, Legal News

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) enforces U.S. economic and trade sanctions. OFAC has featured prominently in recent headlines as the U.S. agency responsible for implementing U.S. sanctions against Russian and Ukrainian entities and individuals to address current unrest in the Ukraine. OFAC sanctions generally block all U.S. individuals… Continue Reading