China law and business eventOn Tuesday, April 18, I will be speaking on China IP at the Global Sources Summit in Hong Kong. This summit is designed to teach entrepreneurs and small businesses how to create and build an Amazon FBA (Fulfillment by Amazon) business. In 12 Business Conferences In China You Should Attend, Bay McLaughlin McLaughlin in Forbes Magazine describes it as follows:

This popular summit shows entrepreneurs and small businesses how to create and build an Amazon FBA (Fulfillment by Amazon) business. You’ll learn actionable strategies to grow your Amazon seller business and get insider tips on successful China importing. With over 3,000 booths this conference in huge! It will be held April 17-19, 2017, in Hong Kong.

I will be speaking Tuesday, April 18 on “How to Protect Your IP From China, Especially From Your Own Manufacturer,” focusing on the following:

  • How to choose the right China manufacturer
  • How to identify the IP assets you need to protect
  • How to structure your China manufacturing deal
  • How to draft your China manufacturing contracts to protect your IP
  • What you should know about trademarks, patents, copyrights, and licensing agreements
  • What to do when you’ve been copied

You can register for the Global Sources event here.

I will then cross the bay to speak in the middle of the afternoon on April 21 at Global From Asia’s Cross Border Summit, whose theme is “Grow Your Business in Asia.” This event too made Forbes Magazine’s top 12 for China list and Forbes justifies this choice as follows:

Held in Shenzhen, China, on 21-22 April, 2017, this event encourages international participation among industry leaders in cross border commerce between China and the rest of the world with content related to marketing, management, manufacturing, and technology. There are numerous roundtable discussions and networking sessions to encourage collaboration and idea generation. This event is hosted by Global From Asia, which also has a fantastic podcast about doing business in China.

My talk will be on “Global IP, In and Out of China: Protecting your brand via trademarks, inside China and globally.” You can register for the Cross Border Summit here.

Both events have a plethora of great speakers and I hope to see you at one or both of them.


By now just about everyone knows about the Chinese-American doctor who was forcibly removed from a United Airlines airplane. To say this has been a PR mess for United Airlines would be an understatement. It has been a worldwide disaster. America is angry. China is outraged. The video has gone viral. Full disclosure: I started my legal career in Chicago at the law firm that back then (and I think still does) represent United Airlines and I have been a Platinum 1K (the highest tier) at United Airlines since as long as I can remember and I generally like the airline and I generally defend it.

What does this have to do with your China business? Everything.

Let me explain.

If you run any sort of business, you need to be prepared for major problems and you need to have a plan in place for dealing with those problems. Your plan must include how to prevent the problem from occurring, how to mitigate the problem if it does occur, and, sometimes most importantly, how to apologize for the problem when it does occur. If you do not have such a plan in place, your China business is at risk, and let me tell you, China poses major risks. Why is that? Because China has ~1.5 billion people and a large chunk of those people are on the internet and what happens in China or with China does not just stay in China, and vice-versa.

Let’s analyze what United did wrong and how you can do better. First off, United should have prevented the problem in the first place, and I am not talking about better algorithms that might have prevented the overbooking situation, though that certainly would not hurt. No, I am talking about how (based on what I have read) United was willing to offer only $800 to get passengers off the plane once it had become clear there was an overbooking situation. Why didn’t United just keep raising its bumping reward until it got voluntary takers? You can’t tell me that it would not have gotten more passengers off that plane had it kept raising its offer. I have to believe that it had it been willing to spend another $700 per passenger it would have had sufficient takers. United needed to get four passengers off that plane. Do you think paying another $2800 total will have killed them? What do you think this debacle is going to cost United in cancelled or never-booked flights? I’m just wildly guessing, but I’d say more like $2.8 million than $2800. Not to mention the inevitable lawsuits which will cost them another ~$2.8 million in attorneys’ fees and payouts and additional bad and lingering publicity. Does United not give enough authority/discretion to its employees to solve problems like these?

And now let’s talk about the “apology,” which I intentionally put in quotes because it really was more of an airline-speak statement.
China contingency planAccording to Psychology Today (which is what I always use when I am playing psychologist), you only get one chance to make an apology without sounding excessive. Therefore, you need to nail it with your one chance. And United Airlines most certainly did not. Let’s break down this apology.

  • It starts out saying this is an upsetting event to all of us here at United. Really? This is nearly the equivalent of saying, you having to witness your mother dying really makes me feel bad. Why is United focusing on how this has impacted United rather than on how it impacted its own passengers? Not smart.
  • I apologize for having to re-accommodate these customers. Really? I did not have sexual relations with that woman. When you apologize, you should personalize it and humanize it. This “apology” fails on all accounts. It does not constitute an apology for the way a passenger was dragged off a plane nor does not apologize for United having overbooked the flight. It is in the passive voice; rather than say I apologize for our having…., it makes it seem as though United had no choice but to do what it did. But United did have a choice as it could have paid more money to get passengers off. This is a classic non-apology. And what the heck does re-accommodate mean anyway? Is this airline-speak, because it sure as hell isn’t the way the normal people I know speak. Using industry buzzwords is a classic way to create distance and yet this is a time when United should be doing everything it can to reconnect with its customers.
  • “Our team is moving with a sense of urgency to work with the authorities and conduct our own detailed review of what happened. Your mother froze in the cargo hold, but don’t worry, we will move with a sense of urgency to work with others to review what happened. What the heck does this even mean? 1. Why say “sense of urgency” instead of just “urgency.” Another example of trying to create distance. Why talk about working with others? Why say “to review what happened” instead of to determine and report back on what happened. Most importantly, you are the CEO of United Airlines, have you not watched the video? Isn’t there enough there to say that the situation was handled poorly? Should he not at least have referred to what happened?

Now as a lawyer I know that an apology constitutes an admission that can be used against you in a court of law, but surely Munoz could have said something more clearly and more compelling than this. Munoz just really never takes responsibility for the problem. He never takes ownership of it. And don’t think apologies don’t matter. Many years ago, I spoke at a terrific lawyer conference on the cutting edge of law. I remember one of the speakers (I apologize because I do not remember his name) gave a great talk on crisis management and he used MLB pitchers Roger Clemens and Andy Petitte as the examples. Both Clemens and Petitte had been accused of using performance enhancing steroids. Clemens vigorously denied having done so and essentially accused those who said otherwise of being liars. Petitte pretty much immediately owned up to his mistake: I used them, I should not have, I am sorry, it will not happen again. How many baseball fans know Clemens used steroids and dislike him for having done so? Way more than with Petitte. I can hear this crisis management speaker saying “Munoz should have emulated Petitte here.”

Our China lawyers often have to deal with PR imbroglios. The below are some of the following:

1. A client makes a product that many consumers would not want others to know they use and it has its Chinese manufacturer ship this product direct to the consumer who orders it and when the order goes out an email from the Chinese manufacturer goes out saying that the product has been shipped. This email appears to come from our client and usually — of course — this email goes out only to the one person who ordered the one product. But one day it inadvertently went out to every single person who had ever ordered the product and it went out to all of these people in the “to” line so that everyone else could see everyone else’s email address. We and our client immediately went into overdrive and sent out an email apologizing for the problem, owning up to it, assuring that it would never happen again, and offering a substantial discount on any future orders within the next year. This apology email went to one person at a time and it went out within 15 hours of the incident. Our client got hundreds of responses back to its own email and almost all of those responses were appreciative of how quickly and decisively it had acted. They got a few emails from people saying that they would never buy from our client again, but that was it.

2. Many years ago, a company that made ultra-high end outdoor equipment at prices about double of any of its competitors came to us because its Chinese manufacturer had sold product that our client had rejected as defective — let this be a lesson as to why your China manufacturing contract should clearly provide exactly what happens to rejected product. Anyway, the defective product had found its way to the United States and many many buyers of it had come to our client to ask for a replacement per our client’s 100% replacement guarantee. Our client said that the defective products were not theirs and they were right as the defective products were actually counterfeits. Our client wanted us to research its legal obligations to replace the defective product. My response to them was as follows: Look, we can charge you a lot of money to legally support your decision not to replace the defective equipment, but might you not be better off paying to replace it and maintaining your great reputation than paying us to fight against replacement and perhaps irreparably harming your reputation. The client said “umm” and that they would get back to me on how to proceed. They chose to replace and I have always thought that was a wise decision.

I could go on and on with real life examples but it would be a lot more productive for you to create your own worse case scenarios for your own business. 

Back in the golden age of China blogging, Will Moss (now the Director of Reputation Management at Intel) had a terrific blog called ImageThief, that focused (at least sometimes) on China public relations. He did a post once on how foreign companies need to prepare beforehand for their China PR disasters and I saved the key lines from that post and I repeat them to you below now:

Be prepared to respond fast. Silence often equals guilt in the eyes of the public. Have an issues management kit that anticipates possible crisis scenarios in place beforehand. Don’t rely on guidance from overseas headquarters.

Pay close attention to the tone of public communications. Address concerns. State positions. Don’t condescend or talk down to Chinese audiences.

Get everybody on the same page. Limit public comments to the minimum number of spokespeople and throttle unauthorized communication.

Brief employees so they know what is expected of them and how to respond to media queries, ambushes, etc.

For consumer brands, ongoing monitoring of the Internet is a good idea. Internet scandals are often flashes-in-the-pan, but they can erupt into the mainstream. It’s better not to be caught by surprise.

Great advice isn’t it? And it applies worldwide.

What are your thoughts?

On Tuesday, April 18, China Law Blog’s Dan Harris will be speaking on China IP at the Global Sources Summit in Hong Kong. This summit is designed to teach entrepreneurs and small businesses how to create and build an Amazon FBA (Fulfillment by Amazon) business.

How to protect your China IP eventDan will speak on protecting your intellectual property from China, focusing on the following:

  • How to choose the right China manufacturer
  • How to identify the IP assets you need to protect
  • How to structure your China manufacturing deal
  • How to drafting your China manufacturing contracts to protect your IP
  • What you should know about trademarks, patents, copyrights, and licensing agreements
  • What to do when you’ve been copied

Forbes listed the Global Sources Summit in its top twelve conferences you should attend in China. You can register for the event here. Group discounts are available.



China US tradeChina’s President Xi Jinping is scheduled to meet with President Trump later this week at Mar-a-Lago and trade issues are expected to be at the top of their agenda. President Trump has already warned on Twitter that this meeting “with China will be a very difficult one in that we can no longer have massive trade deficits … and job losses.”

President Trump’s tweet shows how he views China primarily through a US-China trade imbalance lens, linked to American job losses. Trump’s trade worldview ignores the surpluses in trade in services and T-bills the US has with China. He also disregards jobs created by U.S. manufacturers that use inputs imported imported from China to produce higher value added products in the United States. See China. Friend Or Foe? Opportunity Or Challenge? Or, Why Can’t We All Just Get Along? President Trump also refuses to acknowledge (or recognize?) that the United States has lost more jobs to automation than to trade with China. Focusing too much on US-China bilateral trade deficits is an incomplete and misguided way of looking at a far more complex US-China trade relationship.

President Trump also seems to believe China will be willing to renegotiate terms with the US because it is so dependent on the US market. Though China does see the US as a very good and very important market for its goods, it is also true that China exports to all corners of the world and its home market consumer demand is also rapidly growing. China will not agree to massive trade concessions out of a desperate need for access to the US market.

President Xi also likely will be able to use this meeting to score points for his constituents back home. He will almost certainly demand that the U.S. treat China as a market economy, as promised fifteen years ago in the US-China WTO Accession agreement, even though he knows there is no way the U.S. will grant China market economy status under President Trump’s watch. China thus far has not overreacted to any of Trump’s blustery threats and has instead patiently waited to see what specific trade actions Trump orders. Until President Trump orders 45% tariffs on all Chinese imports or labels China a currency manipulator, President Xi will almost certainly continue taking what the international community will view as the high road and just keep firing off missives about how no one wins in a trade war. If though President Trump takes strong concrete actions against China at this week’s meeting, you can be certain China will quickly retaliate by taking its own trade action.

President Xi likely sees this meeting as an opportunity to elevate China’s standing as a more reasonable global market player than the United States and if President Trump continues to antagonize its global trading partners, China becomes a more attractive alternative trading partner. Loans from the China Development Bank and Export-Import Bank of China already have become the a very important source of foreign financing throughout Asia, Latin America and Africa. If Trump wants the U.S. to scale back from participating on the global stage, China is more than willing to step up and try to fill the void.

There will be plenty of posturing and both sides will get the sound bites they want to satisfy their core constituents at home, but it’s not clear what, if any, specific tangible takeaways either side will get from this meeting. Time will no doubt tell and we will be reporting back.


Doing business in ChinaOn March 30, China Law Blog’s own Dan Harris will be putting on a webinar on the legal aspects of doing business in China, with a focus on how to structure your Chinese operations and deals so as to protect your IP. This webinar is being put on by CommercialLawWebAdvisor, which describes it as follows:

Companies often cannot afford not to do business in China. Whether producing goods there or selling to the Chinese market, companies that engage in business with Chinese partners need up-to-date legal advice on how to protect their technology and other intellectual property (IP) interests from being counterfeited, pirated, or otherwise misappropriated. As IP theft is one of the top issues facing businesses operating in China, there are substantial risks companies must identify and address proactively to protect their valuable IP assets. Deals made in China can threaten IP rights not just in China, but in markets around the world. Understanding the Chinese IP landscape and how to manage the pertinent issues can go a long way to safeguarding your client’s valuable IP interests.

Please join Dan Harris as he explores the nuts and bolts of constructing a good business deal with a Chinese partner, what your agreements should include, and how to manage the Chinese IP rights framework to minimize your client’s IP-related risks.

This webinar will cover:

  • How to choose a good Chinese partner
  • Identifying the IP assets that need protection
  • How to structure your deal
  • Drafting your deal papers
  • Drafting China employee contracts to protect your IP
  • IP registrations: What you should know about trademarks, patents, copyrights, and licensing agreements

Your conference leader for “Doing Business in China: Structuring Your Deal and Protecting Intellectual Property” is Dan Harris. Dan is an attorney with Harris Bricken, LLP, in Seattle. He is internationally regarded as a leading authority on legal matters related to doing business in China and in other emerging economies in Asia. Forbes Magazine, Business Week, Fortune Magazine, BBC News, The Wall Street Journal, The Washington Post, The Economist, CNBC, The New York Times, and many other major media players have looked to him for his perspective on international law issues.

Dan writes and speaks extensively on Chinese law with a focus on protecting foreign businesses and his China Law Blog is regarded as one of the best law blogs on the web today. The ABA Journal recently named the China Law Blog to its Blawg Hall of Fame (a designation given to the top 20 law blogs of all time).

This session is recommended for corporate and in-house counsel and really for any attorney who advises companies or organizations on China and on China IP issues. It also is good for intellectual property attorneys looking to learn more about China IP law and what makes it so different from common law countries.. Find out more about costs and registration here and for a $35 discount use promo code cw17bc.

We hope to “see” you there.

In the last week, from most recent to oldest, we wrote about the following:

1.  How Chinese companies steal your intellectual property.

2. How terminating your employees in China can come back and bite you.

3. How difficult it can be to figure out the capital requirements for your WFOE.

4. How complicated it can be drafting a China sales agency contract. This post not only started out with the following preamble: “With China getting more expensive and more difficult for foreign companies, and with many foreign companies choosing to leave China rather than risk getting caught for operating there illegally.”

5. How China companies will counterfeit your products.

6. How China is cracking down like never before on companies with “independent contractors” in China. This was I think our third or fourth post on this just this month as we just keep seeing the number of American companies getting caught for this increasing and the penalties become more onerous. We titled this article Doing Business in China with Deportation or Worse Hanging Over Your Head and we used the following picture with that post:

China WFOE lawyer

7. A Chinese Law Bibliography.

A psychologist would look at the above seven and quickly find that they all have one theme in common. China is a difficult, even dangerous place for foreign companies doing business there, seeking to do business there, or even doing business with Chinese companies. And your salvation comes from knowing and obeying the law and being able to use the law to your advantage. Hey, that’s what we do for a living: we are China attorneys and we help foreign companies gain an advantage over Chinese companies by using the law.

But I have to admit that this all can get a bit unrelenting and that there is more to life than gloom and doom. And hey, if you knew us, you would quickly learn that in real life we are some of the nicest most optimistic upbeat people  you could ever hope to meet. Truly.

And today I aim to show that with the following link to an amazing video on North Korea/South Korea relations by a true expert in the field. Now I could tell you that I am posting this video because the relations between North Korea and South Korea are in many ways a proxy for the relations between China and the United States, and then I could go on to discuss how the relations between these four countries might impact your business with China. But I won’t even try that. Instead, I will admit that I am posting this for one reason and one reason only. Because I found this to be one of the funniest things I’ve ever seen. Maybe it is because I have done many a TV (and radio) interview myself (too early in the morning or too late at night) in a room with the door closed and sometimes with one or both of my daughters making noise in the background, and always living in fear that one just might burst in while I am talking, as they so often used to do when I was on my cell phone talking to a client. Heck, at a certain age, they used to mimic me or try to get me to laugh while on those calls. So maybe I find the following video and article so incredibly funny simply because I can so relate to it. Be that as it may. No ulterior motives here. No China business scare tactics here. Just an attempt to get you to laugh and enjoy.

Watch the video first then read this article (please, please, please read the article, which analysis heightens the video and is almost as funny as the video itself) and then watch the video again. Then let us know what you think. I’m guessing many of you have already seen it, but enjoy it again; it does not get old.

Nobody panic, we will eventually return to our regularly scheduled programming. In the meantime though, have a great day. China attorneys

China media and entertainment lawOur Beijing-based entertainment attorney, Mathew Alderson, will be speaking on a panel at Southwestern Law School in Los Angeles on January 19th. The panel is entitled “China and Hollywood: Distribution and Censorship in a Cross-Pacific Partnership“.

Mathew’s panel is part of the Southwestern Law School’s 14th Annual Media Law Conference, whose theme this year is: Keeping the Beat in a Crazy Year: Blurred Lines and Border Crossings.

Mathew’s panel will focus on how to work within China’s legal system on new productions and on how to deal with the unique challenges China presents when doing productions there. The event will be moderated by Covington’s Nicholas Francescon. The other panelists will be J. Martin Willhite, General Counsel and COO of Legendary Pictures, and Sheri Jeffrey from Hogan Lovells. The Conference is presented by the Biederman Entertainment and Media Law Institute and the Media Law Resource Centre.

If you are interested in China media and entertainment law or media and entertainment law generally (particularly IP law), you should go. The conference runs from 1 pm until 7 pm, with the post-event reception scheduled to last until 8 p.m. Go to this link to register.

We hope to see you there.

Cuba investment laws

Of course it’s not, but having just returned from ten days there, I figured I needed to write about it and since this is the China Law Blog (and not the Cuba Law Blog, which url my firm owns!), I figured I would need to get “China” somewhere in the title.

But Cuba does have a lot of similarities to China, at least China two decades ago. I went to Cuba in large part because my firm has an office in Barcelona, Spain, and to our Spanish clients, going into Cuba just is not all that exotic. One quick side note. I went to Barcelona immediately before heading to Cuba to meet with our Spain lawyers there and to give a speech on protecting your IP from China. I probably told a dozen people of how I would be heading to Cuba right from Spain and probably a half dozen of them said something along the lines of how they were worried about how “the Americans are going to spoil it.” After getting back, I share their concerns.

But without further ado, here are my random thoughts on Cuba.

  1. I spent 90 percent of my time in Havana, at an AirBnb in Nuevo Vedado, with a host who spoke maybe ten words of English, but who actually seemed to enjoy speaking with me despite my less than perfect Spanish. This host let me know that though most people in Cuba rely on either God or the government, he — being an engineer — had learned to rely on his own intellect. I also went to Viñales and to Miramar (which is really just a Havana suburb).
  2. I was surprised at how often I was approached on the street by people who simply wanted to use their English and who wanted me to know that “the United States is the best country in the world.”
  3. Pretty much everybody also wanted me to know that they thought Trump was either “crazy” or “interested in just the money.” I heard both of these things so many times that I began to wonder whether the press was saying this.
  4. Speaking of the press, every single person I asked (of all skin colors) insisted that racism had been “eradicated” in Cuba. I wish that were true, but know that it is not, but based on my observations alone (and the huge number of interracial couples and friendships), the situation appears impressive.
  5. Cuba is an incredibly safe city. Every person (including those I trusted) said violent crime is virtually non-existent. Many warned me of pick-pockets as though they were everywhere, but I saw no evidence of that. Nobody seems to hesitate to walk alone at night, anywhere.
  6. The food was much better than I expected. I would describe it as very good, but not amazing. The two best restaurants were Atelier (where President Obama went) and La Guarida (where every celebrity goes. As evidence of their standing, these were the only two restaurants that had Diet Coke.
  7. You cannot use your American credit cards anywhere, and I suspect this is because no American bank will run them through. Yet.
  8. The Internet is terrible in Cuba. Terrible. It literally went out for a day, pretty much everywhere in Havana, including the airport. The only fast Internet I found was in the business center at the Hotel Nacional. Second best was at the Melia Hotels.
  9. The grocery stores are not well stacked. At all.
  10. Many small businesses are springing up.
  11. Some of the people with whom I spoke had nothing but good things to say about Cuba. Some told me that 75-80 percent of the people eat pretty much nothing but rice and beans and eggs and bread, all of which are really really cheap, but most every other sort of food is not.
  12. Most of the foreign investment in Cuba is from Spanish companies, but Canadian, Mexican and other Latin American companies are there as well, with China seeming to be accelerating its investments too, especially in building new hotels.
  13. Things do not happen on American time. We wanted to go to Trinidad one day and the taxi driver with whom I had made the arrangements and confirmed multiple times showed up 45 minutes late and with a different car, one that was way way way too small. So we had to adapt. There is a lot of that in Cuba. I can remember only one meal where the restaurant had everything we ordered off the menu.
  14. Jose Marti Airport has five terminals, spread throughout the city. At least two are international terminals, so know before you go.
  15. Cuba’s foreign investment regime makes China’s seem like a can of corn (figured I had to get in a baseball reference somewhere).

The question everyone asks me is whether they should go to Cuba and, if so, when. My answer is as follows:

Most emphatically yes. The people are great. The scenery is great. The buildings are great. The cars are great. The food is good. The place is safe and great for walking. But do not go there expecting Paris because you will be disappointed. And I cannot stress enough how you have to be prepared for no internet and no credit cards. Bring a lot of money and bring a guidebook. Multiple times people would see us with our guidebook and plaintively ask us where we got it, and then when we told them the U.S. they would ask to take pictures of certain pages. Oh, and go now before the Americans spoil it.


China Legal HolidaysLike pretty much everything else related to China employment law issues, the rest (or not) schedule for national holidays is a bit more complicated than one would think. For example, employees get a couple of long breaks but usually have to make up the time on a weekend, so the actual days off are shorter than they at first appear. This concept of “making up the time for a legal holiday” (节假日调休) for purposes of having a (superficial) long break is unique in China and as with so many other aspects of China employment law, is quite different from the U.S. or the European systems.

Per the PRC State Council’s recent notice, the national holidays for 2017 will include the following: New Year’s Day, Chinese New Year, Tomb sweeping day, Labor day, Dragon boat festival, Mid-autumn festival and National day. Specifically:

  • New Year’s Day: A one-day holiday. As January 1 falls on a Sunday, China employees will get January their day off on Monday, January 2. 
  • Spring Festival (aka the Chinese New Year): A three-day holiday, i.e., the first three days of Chinese New Year according to the lunar calendar. China employees will get a long break: from January 27 through February 2, however, they will have to work on January 22 (Sunday) and February 4 (Saturday), unless their employers provide a more generous time-off policy (e.g., per the employer rules and regulations).
  • Tomb sweeping day: A one-day holiday and the specific date will be according to the lunar calendar. China employees will get April 2-4 off, but will have to work on April 1st (Saturday).
  • Labor day: A one-day holiday: May 1st. Employees will get 3 days off: April 29, 30, May 1st. Note however April 29 and 30 are rest days so it’s really just one day off.
  • Dragon Boat Festival: A one-day holiday and the specific date will be according to the lunar calendar. Employees will get May 2829 and 30 off, but will have to work on May 27 (Saturday).
  • Mid-Autumn Festival: A one-day holiday and the specific date will be according to the lunar calendar) (Three days—October 1, 2 and 3). This Festival will be combined with National Day in 2017, meaning that China employees will get a long break from October 1 through 8, but will have to work on September 30 (Saturday).

Bottom line: As a China employer, if possible, do not have your employees work on a legal holiday.


China Lawyers


From all of us, to all of you,

Happy Hanukkah, Festivus, Kwanza, and Winter Solstice, and Merry Christmas too!

ENJOY the season/holidays!