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China Employee Leaving Employment Early. Forget About Payment In Lieu Of Notice

Posted in Legal News

China allows employees to terminate labor contracts by giving 30 days written notice to the employer during the standard employment term or 3 days written notice during the probation period. Our clients occasionally ask us whether it is permissible under Chinese law to require an employee to pay a certain amount of money (代通知金 or… Continue Reading

“Hiring” Your China Employees Through A Staffing Agency. What To Do.

Posted in Basics of China Business Law, Legal News

With the costs and the hassles of forming and operating a WFOE in China always increasing, we are finding more of our clients are choosing to retain personnel in China via third party staffing agencies. Doing so is relatively easy and relatively inexpensive, assuming you can find a third party staffing agency willing to do… Continue Reading

How To Terminate A China Employee Non-Compete Agreement. Very Carefully.

Posted in Basics of China Business Law, Legal News

China allows for non-compete agreements that prohibit high level employees from working for another company that competes with the employer. However, these agreements are generally limited to senior management, senior technicians and other personnel who have a confidentiality obligation to the company. In exchange for the employee’s promise to maintain the non-compete requirement, the employer… Continue Reading

Why Alibaba Is Good For China VIEs

Posted in Legal News

Our China lawyers have a long history of skepticism regarding China VIE structured entities.  In Buying Into A China VIE. What Me Worry? we had this to say about them: Years ago, we here at China Law Blog made clear our views on VIEs and nothing about those views has changed.  For that reason, and because VIEs… Continue Reading

China Employment Law. Watching A Bit Of The Sausage Being Made.

Posted in Basics of China Business Law, Legal News

As the Chinese government starts taking its employment laws more seriously (at least with respect to foreign companies doing business in China), our China employment law work just keeps increasing, as does our blogging on it.  The below is an email from one of our China lawyers (who is doing China employment law about half… Continue Reading

Changing Your China Factory? Be Careful.

Posted in Basics of China Business Law, Legal News

Just read an article, Toy supplier sues maker in reshoring fight about an American toy maker’s lawsuit against its Chinese supplier. The article describes the lawsuit as being based largely on allegations that the Chinese supplier ceased providing the American company credit and delayed deliveries, all in an attempt to make it impossible for the American… Continue Reading

China Law For Foreign Companies Doing Business In China. It’s Real.

Posted in Basics of China Business Law, Legal News

Pretty much since we started this blog, we have written posts that essentially set forth the following mantra: China has laws. China increasingly is enforcing those laws, against both domestic companies and foreign companies operating in China. Probably more against foreign companies operating in China than against domestic companies. You are entitled to complain about… Continue Reading

China Non-Competes. Oh, Oh, The Price You’ll Pay

Posted in Legal News

A Non-Compete Agreement is a contract where one party agrees not to compete with the other. These agreements reduce the likelihood of someone using information you provide them to compete against you. Non-compete agreements are fairly common between Western companies and their more important employees and it is common for those Western companies to want similar… Continue Reading

China Product Development Contracts: The Questions We Ask

Posted in Basics of China Business Law, Legal News

We often write on how foreign companies outsourcing their product manufacturing to China need an NNN Agreement (in Chinese), an OEM Agreement (in Chinese), and their trademarks registered in China. For most companies seeking to manufacture product in China, those three are enough. But for those foreign companies that do not have a finished product ready for manufacturing, a fourth… Continue Reading

China Compliance: The Mooncake Version

Posted in Basics of China Business Law, Legal News

The Mid-Autumn Festival is coming and mooncakes will soon be given to Chinese family, friends, and colleagues to demonstrate appreciation for these individuals’ generosity throughout the year. Most will exchange delicious mooncakes during the Mid-Autumn Festival with the purest of intentions. However, the holiday also provides an opportunity for individuals with less admirable intentions to… Continue Reading

China Employee Probation: Don’t Let It Slip Away

Posted in Basics of China Business Law, Legal News

In China, employment contracts for new employees often include a probation period  (试用期) designed to give the employer (mostly) and the employee time to test each other out. Generally speaking, the longer the initial employment term, the longer the probation period may be. However, the length of the probation period is not without limitation. Under… Continue Reading

China Joint Ventures That Work

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

China joint ventures are notorious for their high failure rate. An old Chinese saying that is often applied to joint ventures is “same bed, different dreams.” This Chinese saying (同床异梦) actually far predates joint ventures — it applies to any sort of partnership without a meeting of the minds. Far too often, American companies and Chinese companies… Continue Reading

China Employment Offer Letters: Be Careful.

Posted in Basics of China Business Law, Legal News

In China, an offer letter (录用通知书) is a written document delivered by an employer to an employee stating the employer’s intent to enter into a labor relationship with the employee. An offer letter typically proposes the employee’s work title, work location, wages, and the term of the employment arrangement. Despite the relatively common use of… Continue Reading

China Compliance: Don’t Rely On Your China Staff, Part IV

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

In Part 1 of this series, I discussed how Chinese staff of foreign companies operating in China typically view China compliance very differently than the foreign company itself. In Part 2, I talked about how the views of Chinese staff can negatively impact the foreign company’s China compliance efforts. In Part 3, I discussed one aspect of what… Continue Reading

China Compliance: Don’t Rely on Your China Staff, Part II

Posted in Basics of China Business Law, Legal News

In yesterday’s post, we briefly talked about the rash of legal problems lately besetting foreign companies doing business in China and of how foreign companies must avoid the temptation to assume that their Chinese staff have all China legal issues covered. This post addresses the resistance foreign companies (and their lawyers) often face from Chinese… Continue Reading