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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 III

Posted in 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 this post, I am going… 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

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

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

China IP: The Video Game?

Posted in Legal News

The idea that video games can impart real-world skills has been around almost as long as video games themselves. In the forgotten 1984 film The Last Starfighter, a teenager masters a video game and is immediately recruited as a spaceship pilot—because the game was actually the proving ground for an intergalactic defense force. In the… Continue Reading

China Cosmetics From Overseas. Animal Testing Required.

Posted in China Business, Legal News

We represent a number of all natural organic cosmetic companies. Almost without exception, these companies tout how their products are “cruelty free” because they are never tested on animals. Many of these companies rightly see China as an excellent market for their products. Some of these companies have been contacted by Chinese companies interested in… 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