China e-commerce laws

About a week ago, in China’s New E-Commerce Law and Its Foreign Company Impacts, I wrote how China’s new e-commerce law will likely impact foreign companies doing business in China or with China. Because the new law does not offer much practical guidance and has yet to be bolstered by official interpretations or implementation rules, it is difficult to state with precision how exactly it will be applied and implemented. Nonetheless, using what we have read in the official and unofficial press and our discussions with Chinese government officials and also using also what we have learned over the last decade from representing companies involved with China’s e-commerce industry, we below (and in a subsequent Part III to this post) seek to explain some basic aspects of the e-commerce law.

 

— What constitutes e-commerce activities under Chinese law?  Under the new e-commerce law, e-commerce activities encompasses the selling of goods or services via information networks. Goods sold via information networks can be tangible things, such as apparel, electronics, and cosmetics or intangible things like coupons you can redeem at a restaurant. Services via informational networks includes services performed online, such as telemedicine, and services sold online but performed offline, such as online sales of travel packages, rental car booking services, or tutoring. The law governs transactions completed using information networks, whether the actual service or delivery of goods happens online or offline.

 

— Are foreign businesses subject to China’s new e-commerce law?  It depends. The e-commerce law applies only to e-commerce business activities within China. Though “within China” is not clearly defined, a popular (albeit unofficial) view is that if the activity contains any Chinese element, it will be deemed to occur “within China.” Under this view, a China WFOE selling products of its parent company online would be considered a China e-commerce activity, as would the sale of products on a Chinese e-commerce platform by a foreign business without a Chinese entity. Even the sale of products on a foreign website by a foreign entity to a consumer in China will likely also be considered to have occurred within China and therefore subject to the e-commerce law.

Even a foreign business that is not subject to China’s new e-commerce law needs to pay attention to other Chinese laws when selling products to China, such as the laws regarding importing and exporting, customs, publications and cybersecurity.

 

— Further Impact on foreign brands.  Though the new e-commerce law is not aimed just at cracking down on daigou (See China’s Daigou Shopping Model: This is the End, My Friend….) and though it will obviously not stop Chinese consumers from seeking other channels from which to buy foreign goods, it will serve to reduce daigou/grey market sales and by doing so it necessarily will bolster legal e-commerce sales by foreign companies.

The daigous most likely to be negatively impacted are the “professional” daigous. These are the people who travel abroad regularly to bring back three (or more) suitcases full of products, or who live abroad and go to an outlet mall every weekend to send products back to their buyers/agents/compatriots in China. They usually have shops on e-commerce platforms such as Tmall or they regularly post pictures on their WeChat or other social media accounts to update their customers and then they communicate with those customers on WeChat and close their transactions via WeChat as well.

Because all e-commerce operators must report taxes and because it is clear China intends to enforce this taxation requirement, “professional” daigous will have a harder time operating. Their profit margins will be significantly reduced. As we previously wrote, defrauding Chinese customs is an essential part of many (most?) daigous’ profit margins because China has historically imposed significant duties on a range of luxury imports. Daigous often (usually?) do not report or pay taxes on the income they derive from their sales. If daigous were to pay their taxes and declare the actual value of the goods they are bringing into China and pay the customs duties on those goods, they would lose all or almost all of the cost/pricing advantages they currently enjoy. The online platforms/portals on which daigous traditionally operate will also play a role in the demise of daigous. Because the various online platforms/portals can be held liable for not taking action against those who operate illegally on their sites, they are incentivized to help the Chinese government crack down on illegally operating daigous. For example, if a daigou is selling Balenciaga purses on Tmall and Tmall receives complaints from Balenciaga that the daigou is an unauthorized reseller and is infringing on Balenciaga’s IP rights, Tmall will no doubt take action to stop the daigou from conducting its unauthorized sales

Thus, the law should greatly benefit foreign brands by bringing China’s online platforms/portals and daigous into compliance.

 

–Selling to China’s consumers via cross-border e-commerce 

Finally, rules accompanying the new e-commerce law allow foreign brands to legally sell to China at a retail level. According to a December 2018 notice (“Notice”) from six Chinese government agencies regarding cross-border e-commerce retail imports (the Notice about Market Regulation on Improving the Supervision over Cross-border E-commerce Retail Imports, 六部门关于完善跨境电子商务零售进口监管有关工作的通知, Shang Cai Fa [2018] No.486), products imported at a retail level from cross-border e-commerce companies are regulated as products imported for personal use and they are not subject to many approval, registration, filing or labeling requirements that would normally apply to regular imports for trade or resale.

Under this Notice, a viable method for foreign brands to sell to China’s consumers is to work with Chinese e-commerce platforms, which method we will discuss in our next post in this series.

Contract manufacturing listHere’s the reveal: We have no such list.

Pretty much every week, someone writes one of our manufacturing lawyers about the following:

  1. To ask about a particular overseas manufacturer;
  2. To complain about a particular manufacturer and to ask us to tell our blog readers about this company or report them to such and such government or embassy or to ask; and/or
  3. To ask us whether we have or know of a list that ranks manufacturers on their trustworthiness/reliability/quality;
  4. To ask if they buy “through” Alibaba whether they will “be protected.”

1. Our standard response to those seeking information about a particular manufacturer is as follows.

There are hundreds of thousands of contract manufacturers around the world and our international lawyers have worked with just a small sliver of those and we are not familiar with _____ company. We can though help you determine the reputation and the financial wherewithal of _____ company. See Basic China Due Diligence. Is This Chinese Company Legitimate? and China Partner Due Diligence. The fees for this very much depend on the depth of our investigation, which can range from just making sure the company actually exists and is licensed to manufacture the products you want it to make for you, to full-on credit reports and even talking with its vendors and customers. In turn, the scope and depth of the due diligence that will make sense for you will depend on the monetary and IP risks you will be taking by doing business with this particular company.

2. Our standard response to the request that we report bad suppliers on this blog or some embassy or to some government is as follows:

We do not list problem manufacturers (or great manufacturers) on our blog because we have no good and fast way to determine that what one person tells us about a particular manufacturer is accurate or not. To be blunt, much of the time when product buyers have problems with their overseas manufacturer, the fault does not lie solely with the manufacturer. As far as us reporting X manufacturer to Y government or Y embassy, that virtually never has any impact and so we would not feel right charging anyone for us to do that, but there is, of course, nothing stopping you from doing that.

3. Our standard response to whether we have or know about a list that ranks manufacturers on their trustworthiness/reliability/quality is that we have no such list nor is there any such list we recommend. I then usually suggest that if they do not deem it worthwhile to spend money for due diligence on their potential suppliers they should at least do a Google search on them.

4. My standard response on whether buying “through” Alibaba will “protect” them is no.

Finding the right manufacturer overseas is not easy and, if anything it is getting more difficult because it typically involves more countries than in previously.  See The China-US Trade War and the Winner is….MEXICO and The US-China Future: Meet Vietnam, Thailand, Mexico, Malaysia, Turkey, and the Philippines.

A few weeks ago, I got an email from a self-described “avid” reader of this blog with the following question:

I am looking to have ______ made in either China or Thailand but I don’t have enough money to hire anyone to help me with product sourcing or even to visit the factories before I choose one. I also cannot afford any legal help for my contracts. What do you advise I do to protect myself.

My response was the following sentence: “My advice is that you wait until you have more money and, if possible, you in the meantime start out strictly domestically.” The avid reader responded with one word: “Thanks.”

Whenever I speak about how to protect yourself when doing business overseas I talk about the following as the three keys:

  1. Good partner. In other words, be sure to choose a good supplier and the right supplier for you.
  2. Good contracts. Your contracts should be enforceable and protect you from key risks, such as IP theft and bad and late product.
  3. Good IP registrations. Trademarks, copyrights and/or patents.

I sometimes add a fourth: good quality control/good monitoring.

There are no shortcuts. And there is no list. Sorry.

President Trump and China

Now before anyone starts complaining, the letter grade in the title comes from the Council on Foreign Relations, truly one of the most august foreign relations think tanks in the world. Per Wikipedia:

The Council on Foreign Relations (CFR), founded in 1921, is a United States nonprofit think tank specializing in U.S. foreign policy and international affairs. It is headquartered in New York City, with an additional office in Washington, D.C. Its membership, which numbers 4,900, has included senior politicians, more than a dozen secretaries of state, CIA directors, bankers, lawyers, professors, and senior media figures.

That’s right, the Council on Foreign Relations says President Trump is doing a really good job with China. Don’t believe me? Go here and download the pdf and read it for yourself. This is not a joke and in fact, I am firmly convinced most who deal with China would roughly agree with that assessment. Wait you say, this cannot be. President Trump doesn’t understand foreign policy and his spouting off on Twitter is anything but diplomatic.

Well guess what, it’s not as though the Council thinks President Trump is doing a good job with foreign policy overall, as indicated by an overall D+ grade, based on the specific breakdowns below:

The grades for President Trump’s foreign policies just past the halfway point in his term are: China (B+), North Korea (B), Syria (B+), Saudi Arabia (B+), Israel (B), Iran (C), Afghanistan (B+), India (B+), Venezuela (B+), and trade (C); against his grades for climate (F), European security (D), Russia (F), policy process (F), character (F), American values (F), U.S. alliances and deterrence (F), and policy implementation (D). This report, heavily influenced by the president’s realistic approaches to China and the greater Middle East, gives him an overall foreign policy grade of D+, a substantially higher mark for his foreign policies than found on the Sunday talk shows, in the editorial pages of the New York Times and Washington Post, or among many U.S. national security experts.

So all you China people out there, step back for just a minute and list out what President Trump has handled badly with China and what he has handled well. And then let us know whether you think he deserves a B+ grade and why you have the opinion that you do. I’ll go first and say that I think the grades above are for the most part pretty accurate and I especially agree with the China grade.

China lawyers
Because of this blog, our China lawyers get a fairly steady stream of China law questions from readers, mostly via emails but occasionally via blog comments or phone calls as well. If we were to conduct research on all the questions we get asked and then comprehensively answer them, we would become overwhelmed. So what we usually do is provide a quick general answer and, when it is easy to do so, a link or two to a blog post that provides some additional guidance. We figure we might as well post some of these on here as well. On Fridays, like today.

A few weeks ago, I was discussing the need for one of our tech clients to have an NNN Agreement with its China counter-party before even sitting down to talk. The in-house legal counsel then asked me why an NNN Agreement was even necessary because she had read that China’s trade secret laws are very well written and very sophisticated. Like any experienced lawyer asked a really good question for the first time, my mind went blank and I responded with a time filler: “Great question,” I responded. I then mouthed something about how it is always better to have something in writing than to just rely on a law.

And then I got on a roll, explaining the below to her.

  1. Our NNN Agreements protect a lot more than just trade secrets. They protect whatever it is you want to protect. Trade secrets include only very specific things and it is not entirely clear even what those things are. If you want to be sure what you want protected will be protected, you need an NNN Agreement.
  2. Our NNN Agreements are contracts. Trade secret protections are not. China’s courts are very experienced in handling breach of contract cases. They are far less experienced in handling trade secret cases. If our NNN Agreement says Chinese Company cannot do this with X and it does this with X, they have clearly breached the contract. With a trade secret case we would need to prove that what you had was a trade secret (and that is not likely going to be easy) and that it violated China’s trade secret laws by doing so.
  3. Chinese companies know and fear NNN Agreements written in Chinese under Chinese law and with clear-cut and enforceable damages provisions. They don’t particularly fear China’s abstract trade secret laws.
  4. China’s trade secret laws are not that great anyway. Yes, what is there is good, but they are not as comprehensive as they should be and the lack of case law does not help either.
  5. I cannot underrate the difficulty in coming up with admissible evidence for China trade secret cases. Our international litigation team has many times been tasked with coming up with evidence for China trade secret cases and unless you have done this before, you probably cannot even grasp how difficult this is and whatever you use for evidence will be challenged by the other side, that much is pretty certain. I am going to make up a number here (there is no other way to do this short of analyzing thousands of cases) but I would estimate that Chinese courts accept as evidence less than half of what American courts accept. Because trade secret cases depend so much on evidence, this will likely be a problem.

Bottom Line:  China trade secret protection is something to look to only if you do not have a good NNN Agreement to protect you. Note also though that it does make sense (and can be very important) to have trade secrecy agreements with your employees.

 

China's Sputnik MomentThe Information Technology & Innovation Foundation just released an excellent report called Is China Catching Up to the United States in Innovation? It looks like the answer is “yes.”

The report concludes that China is making more rapid progress in innovation and advanced technology industries than the United States. The report says there is no reason not to expect China to follow the same path as the “Asian tigers,” (Korea, Taiwan, Singapore and Hong Kong) and rapidly evolve from copier to innovator. But with China, the implications of this for the United States will likely be far greater in terms of its impact on U.S. economic prosperity and national security.

The report says that even though China is presently behind in new-to-the-world or first-of-a-kind innovation, it would be misguided to draw conclusions based on an overly narrow definition of “innovation.” The report goes on to remind us that innovation includes more than just science and engineering and though China is right now in a “fast-follower” stage in those areas, it is making greater progress in other areas like customer-focused and efficiency-driven innovation.

According to the report, no other government in history has done more to promote an innovation-based economy than China. To ensure its continued leadership in innovation and advanced technology, the US needs to implement its own national innovation and competitiveness strategy. The report goes so far as to say that the US needs to react to China’s progress in much the same way it reacted to Sputnik in the 1960s. In other words, the United States needs another Sputnik moment.

Do you agree with this assessment? Will the United States react? How should the United States react? Has the United States already reacted?

 

China WFOE LawyersIn the last year or so, our China lawyers have been seeing a steady increase in emails from people inquiring about selling their China WFOEs and that has only accelerated in the last couple of months. I have gotten three or four of these in the last month alone, including the following one this week, which is fairly typical:

I have a shelf WFOE incorporated and I am looking to sell it and would be grateful if you could let me know whether you can assist. I look forward to hearing from you soon.

We have been getting so many of these lately that I’ve set up the following as my “push button” (literally) response:

It is the extremely rare WFOE that can be sold simply because they are so limited geographically and by business scope and because they come with so many risks. Here’s an article we wrote on this way back in 2014. What is your business and in what city is it located and does it have any employees and why are you seeking to sell it?

As China’s economy continues to contract and as doing business there continues to get more expensive and complicated, we expect the number of foreign companies looking to leave to continue growing. Leaving China for foreign companies often means trying to sell or shut down their WFOE, neither of which are at all easy.

Years ago we got the following question regarding selling a China WFOE:

Is there really a market for existing WOFEs? We have been operating for five years now and we are certainly fully aware of how hard it is, but I do not intend to quit, but certainly there will come a time when we need to exit China. One option is sale, but I really doubt that is possible. Does anyone know of examples? Also partial sale to key staff, for a peppercorn perhaps, seems to be a good idea from a business point of view. Does anyone know if this is possible?

We responded as follows:

Not much of a market at all. The problem is that to buy a WFOE requires that the buyer essentially want to do exactly what the seller has been approved to do. So for example, if I want to do a consulting business in Qingdao, I must buy a consulting business in Qingdao. And then I also have to make sure that the costs of my doing due diligence on the WFOE and the risks of buying into the liabilities and problems of the WFOE, do not outweigh the advantages of taking over a WFOE, as opposed to forming a new one.

We then wrote how it is indeed possible to sell a WFOE and of how our China M&A lawyers have been involved with a couple such sales and they are not difficult from a legal perspective, but they are difficult to justify from a business perspective. We sometimes see are WFOE sales to employees (either expats or Chinese citizens or even combinations thereof) who want to see the WFOE keep going so they can hold onto their jobs. It is possible to sell a WFOE to a Chinese company or a Chinese citizen (and this would include to an employee) and then it converts to a Chinese domestic company. This too is not difficult legally, but such sales are rare because usually the employee knows exactly why the WFOE is closing and usually the employee can choose to essentially take over the WFOE after the foreign company has left, and do so “informally” and without any payment.

You can sell your WFOE to a foreign company looking to do business in China, but that too has all sorts of difficulties, many of which we detailed in a previous post, entitled, Buying And Selling China WFOE Shell Companies. Not In My Lifetime?

In that post, we talked of how our China attorneys are always getting emails and calls from someone asking us if any of our clients might be interested in buying a China WFOE and of how our usual answer is “no.”

The people trying to sell their WFOE usually tout it as being completely liability free and therefore ready to go much faster and at a much lower price than if someone were to have to form their own China WFOE. For what it takes to form a WFOE in China, check out the following:

If you read any of the above posts, you will no doubt conclude that forming a WFOE in China is a convoluted and time consuming process, and it is. Therefore, buying an off the shelf WFOE must be much easier, right?

Wrong.

To quote from our previous post on selling a WFOE:

The thing about off the shelf WFOEs is exactly that: they are off the shelf and not customized. And that is where all of the problems arise. Let’s take as an example a WFOE that someone tried to interest me in many months ago. That company was in the IT outsourcing business in a second tier city. So right there, its only real potential buyer is someone who is interested in doing IT outsourcing in that second tier city.  Because if the buyer of that WFOE is interested in doing anything other than IT outsourcing, it will need to petition the government to expand or change its business scope. Similarly, if the buyer is interested in doing IT outsourcing in some other city, it will need to petition the government to move its WFOE or it will need to set up a branch in that other city, and thereby have to maintain two offices. When you throw in the fact that anyone buying a WFOE will need to conduct due diligence on it to make sure it truly does not have liabilities of any kind (including, tax, employee, environmental, tort, etc.) you can quickly see why forming a WFOE is going to be safer and probably equally as fast and cheap as buying one. The biggest benefit in buying a shell WFOE would be speed, but it is going to be the rare instance where saving a few months will warrant the extra risk.

In the post, “How To Form a China WFOE. Scope Really Really Matters,” we discussed the importance of a WFOE having a proper scope:

BUT — and this is why I am writing this post now — if you under or overreach on the description of your business scope, you might find yourself in big trouble.  We are getting an increasing number of calls from American companies in trouble with the Chinese government for doing things in their business that they did not mention in the business scope section of their initial WFOE.

In some cases, the companies have admitted to us that they were never “really comfortable” with the business scope mentioned in their applications, but that the company they had used to form their WFOE had “pushed” them into it as it would “make things much easier.” In some cases, the scope of the business changed after the application was submitted and the company had failed to secure approval in advance for the change. And in some cases, the company probably would never have been approved at all had it been upfront and honest in its application. In nearly all instances, the companies had managed to secure local approval but were now in trouble with Beijing, which constantly is auditing these applications. In one instance, the local government went back and changed its mind, probably after conducting an audit of its own.

I cannot go into any more detail on these matters, but I can give this advice: applying for a WFOE in China involves a heck of a lot more than just filling out a form and getting approval. It does matter for what you get approved and you (or whomever you are using for your WFOE application) need to know China’s foreign investment catalog inside and out before applying. You then must tailor your application to meet both the requirements of the foreign investment catalog AND the reality of what you will be doing in China. A failure to comply on both fronts will lead to, at best, a rejection of your application and, at worst, being shut down months or years later.

The odds of a shell WFOE’s city and scope lining up perfectly with that of a potential WFOE buyer are low and we are not aware of any website that tries to match up WFOE sellers with potential WFOE buyers.

So yes, buying a WFOE is possible, but difficult. But we do find the idea of selling a WFOE to an employee appealing as it can make for a smooth transition all around. But the real question (again) is not the legalities, it is the practicalities and the desires.

What are you seeing?

Years ago, the China Business Hand [Steve Barru] wrote about his efforts to sell a WFOE in 2005. As he put it, he “could close the business and walk away or try to sell it, [but] …. it turned out that neither option was simple or straightforward.” [Editor’s Note: The China Business Hand Blog no longer exists and the below comes from one of our blog posts]

At first, Barru thought closing down his WFOE would be easy, but it being China, he was wrong about that:

Closing down the business and moving on seemed the easiest way out. Until I discovered that terminating a WFOE license involved getting approval to do so from the long list of government agencies that had approved the license in the first place. To make matters worse, shuttering the business would cost me around $2,000 in fees of one kind or another.

If I had been leaving China altogether in 2005, I would have settled up with my two employees, gone to Hong Kong to convert the company’s remaining Chinese funds to US dollars, and gotten on a plane home, letting Chinese government officials sort out what to do with an abandoned WFOE. Alas, my new job was in Beijing, so this was not an option.

I went to the primary licensing authority, the Bureau of Industry and Commerce, to ask if there was a formal procedure of some kind to make the company inactive (aka: a shell company). Nope. As long as the company existed, I would have to file monthly tax reports, complete the statutory annual audit and license renewal procedures, and meet all of the many reporting requirements of other agencies. The fact that the company would not be engaged in any business activity made no difference whatsoever.

It being so difficult and expensive to shut down his WFOE, Barru then sought to sell it, which too proved difficult:

Selling the company, even for next to nothing, quickly moved to the head of the line. But transferring the business license and my legal person status to the wannabe new owner involved far more than filling out a couple of forms.

It was the buyer who had to jump through the bureaucratic hoops. For all intents and purposes he went through the same process one goes through to establish a WFOE. With one key difference – he did not have to invest new capital in the company. The original US $70,000 in registered capital (that I had put in and had later managed, for the most part, to take out) was all that was required. Since registered capital for a WFOE had increased to US $200k by 2005, there were demands for additional investment, but rather convoluted negotiations eventually got around this obstacle. Fortunately, the buyer was located in Nanjing. The need to move the WFOE to a new locale would have been a deal breaker.

Eventually, after several months of discussions and chopping forms, all the questions about registered capital, business scope of the company, the good character of the new owner, and the license transfer had been answered and the sale was complete. The price probably covered my express mailing costs and bought me a couple of dinners. But I was out from under what had become an enormous, very time consuming headache.

As Barru so accurately observes, forming and running and even closing a business in China is going to require you to get up close and personal with your local bureaucrats:

The fact is, when you are doing business in China, the local government where you operate is your de facto partner. Chinese bureaucrats were involved in every aspect of my business over the years, sometimes in reasonable ways but on occasion as meddlesome pests sticking their noses into strictly business decisions. Even the end of my days as a WFOE owner involved getting government officials to, in effect, give me permission to let my business go.

The same holds true today. In a subsequent post we will discuss what it takes to shut down a China WFOE and why just “walking away” from your China WFOE is usually not a smart thing to do.

China lawyers

Way back in 2011, we wrote a post on how what your company does outside China can impact how it is viewed and even how it does in China. Logical, right? We titled that post China Business And Glocalization. Should What Goes Around Come Around? 

What spurred that post was a multinational client of ours who had sought our help in “harmonizing” its China product return policies with those of the United States and Europe. This company had given Americans and Europeans six months to return its product, while giving Chinese customers only 30 days out of concerns that “too many” Chinese customers would take advantage of the six months. Soon though this company was getting reports from China that its customers were not happy about being treated worse than their American and European counterparts.

In that same post I talked about how the China lawyers at our firm were very much used to hearing and dealing with the above sort of thing, but how it had not really occurred to me how a company’s actions inside China might impact it outside China. That was until I read a Newsweek article (from 2010) entitled, Back to the Days of Blackface, which discussed the fallout Colgate-Palmolive incurred from its ownership stake in a product/brand that would be considered offensive to the overwhelming majority of Americans:

Of all the unfamiliar products in a Chinese supermarket, one of the most shocking to American visitors is a toothpaste featuring the logo of a minstrel singer in a top hat, flashing a white smile. Even more shocking: the paste, known as Darlie in English and as Black People Toothpaste in Chinese, is a product of the Hawley & Hazel Group, a Hong Kong–based company established in 1933, which is now owned in part by the Colgate-Palmolive Co.

Darlie used to be called Darkie. According to the book America Brushes Up: The Uses and Marketing of Toothpaste and Toothbrushes in the Twentieth Century, the CEO of Hawley & Hazel saw blackface performer Al Jolson in the U.S. and thought, “Jolson’s wide smile and bright teeth would make an excellent toothpaste logo.” He was right: the firm now claims to be one of the market leaders of toothpaste products in China, Hong Kong, Taiwan, and Southeast Asia.

Colgate purchased 50 percent of the company in 1985 and, after three years of criticisms, switched the name “from Darkie to Darlie and modified the logo to a less crude version of a black man.” In 1989, Colgate-Palmolive’s chairman stated, ‘’It’s just plain wrong … The morally right thing dictated that we must change [in a way] that is least damaging to the economic interests of our partners.’’

“Yet the Chinese name of the product has remained unchanged.”

This product’s name and imagery is simply no big deal in China, where “it wouldn’t even occur to [most people] them that Black People Toothpaste [another brand of toothpaste in China] is offensive.”

But Colgate is a Western company:

Yet Colgate is a Western company, and as such, “should know better,” says Kwame Dougan, an African-Canadian living in China. Colgate declined NEWSWEEK’s interview requests, instead releasing a statement saying, “There are different perspectives on this issue.” Hawley & Hazel also declined an interview request. Darlie doesn’t exactly advertise its relationship with Colgate; Colgate’s Web site has only two mentions of Darlie, which both talk about how the brand is driving growth in the Asia-Pacific region. Darlie products examined in China for this story featured no mention of the Colgate label.

“I think that the brand should simply be retired,” says Laura Berry, executive director of the Interfaith Center on Corporate Responsibility, one of the organizations that originally pressured Colgate to fix its Darkie brand. Until then, Darlie smiles on.

I then went on to talk about how Colgate’s actions bothered me and I could certainly imagine those actions bothering others.

American and European companies have for a long time been concerned with how their China employment practices can impact their reputation outside China. One only need read pretty much any multinational’s requirements on child labor to get a sense of how important the big companies view this issue.

There has in the last six months or so been a growing uproar regarding foreign companies that help China’s surveillance capabilities but it has only been in the last couple weeks that China’s treatment of its minority religious populations (one in particular) has really been coming front and center in terms of how it can impact business worldwide. The following three things have brought this home to me:

1. Facebook. I am seeing people talking about “how something needs to be done about this” and I am seeing the b-word — boycotts — being bandied about.

2. Clients. Actually just one client, a company known for its progressive stance on such things as employee relations and the environment. This company told me that it is “accelerating” its cessation of China manufacturing because its employees are starting to complain about its China connections on “moral and political” grounds. I am reluctant to explain exactly what aspect of China policy it is that has spurred on these complaints (for fear of what might happen to this site in China), but if you have been reading the news and if you follow the link in the next paragraph you will know.

3. The News.  You really must read this BBC article on Volkswagen to believe it. Of all the companies to essentially deny this particular reality, VW has to be it. Let me just say that pretty much every car I have bought and owned in the last ten years has been German and I have had to defend those purchases from time to time to others, including to one of my own daughters. My defense has always been simple and unequivocal. Germany, perhaps as much as any country in history, has recognized the evil it did (in WWII) and has very much sought to make up for that. And we should not punish the kids for the sins of the parents. But when the CEO of a company like Volkswagen — which was so intimately tied in with Hitler’s regime — makes a comment that is hard to believe (or if believed is equally horrific), I do not think it unfair to highlight its past ties with Nazis or its incessant dishonesty. 

I bring all of this up because I see things bubbling and I am just curious who else has been seeing these things and I am also curious regarding what sort of impact you see these things having on businesses worldwide and, most importantly, on your business. What are your employees and customers telling you? Is all this just more incentive for companies to decouple from China? Or will just not saying incredibly stupid things to the press be enough to protect you and your company? Has China — as a number of clients keep telling us — “just too difficult” or “no longer worth all the hassle”?

You tell us.

China employee questions

Most of my China employment work is for employers, but in the last few years, my work representing expat employees just keeps rising and now equals nearly ten percent of my China employment practice. This increase in expat employment law is due to two things: 1) Chinese companies are hiring more expats, and 2) word has gotten out that what expats are promised by their Chinese employers seldom if ever matches what their employment contract says they are getting and fewer expats are willing to just “trust that it will all work out.”

I read a great post today over at the Shake Well Before Serving blog today, entitled, Accepting a Job in China? Some Questions to Ask. The author, Jeff Lindsay, starts the post by explaining the following qualifications for writing it:

After nearly 8 years in China, I’ve met a lot of foreigners and heard many surprising stories of some of the challenges they face in their jobs, especially when working for Asian companies. In most cases, the employee made assumptions about their job and their employer based on their experience with Western companies. Others didn’t fully understand what was expected of them and what they would have to do. This can lead to pain, frustration, embarrassment, and financial loss. Please don’t make lots of assumptions and assume that everything will be like it is back home.

You need to ask a lot of questions! If you find yourself saying, “I’m sure it will be OK” or “I trust it will be fine,” you may have a problem. In a very foreign culture with different laws and different levels of compliance with those laws, it’s much better to be asking, “What could go wrong?”

Those are some excellent qualifications — our China lawyers can often be heard to say that “our best China clients are those who have been badly burned but somehow managed to survive” — and he proposes potential employees asking some great questions (Mr. Lindsay’s words are in normal font and my comments are in italics):

Can I see the contract(s) you want me to sign before I resign my current job and show up for work in China? Sometimes the “standard” contract your company will give you when you show up for work will be a shocker. You may find the salary you agreed upon is not what is in your contract, that the benefits that were promised are not in the contract, and that troubling provisions are in the contract, such as a rejection of many of the normal employee rights provided by China’s generous labor laws, and even a requirement that a portion of your income will be withheld for some period of time and perhaps only given to you if certain goals are achieved that you may not be able to control and achieve on your own. When you ask about the benefits or other terms you have negotiated, the response may be, “Of course! But that’s just verbal. Trust us.” Realize that the HR person saying that may be totally sincere, but several years or weeks later he or she may be gone (HR turnover is intense in China) and the new person will not believe you when you bring up the verbal agreement that supposedly was made. Contracts may not always mean a lot in China, but verbal agreements with people who are no longer around mean even less.   This is 100% true and we see this sort of thing all the time. In fact, it is the rare case where we do not see at least one of these things in the contract. One thing we also see all the time is the English language contract will say one thing and the Chinese language contract will say something completely different. HERE IS WHAT YOU NEED TO KNOW: ONLY THE CHINESE LANGUAGE CONTRACT CONTROLS; THE ENGLISH LANGUAGE VERSION IS IRRELEVANT. 

Can you put that in writing? Don’t assume that any of the benefits and other terms you have negotiated will be put into writing in your contract. Be prepared for that, which is usually something that we gullible foreigners have not even imagined as a possible risk. I suggest that you insist that everything is in writing. I 100% agree. What is promised to you orally is irrelevant. Only the Chinese version of your written employee contract, the Chinese version of your Employer Rules and Regulations and China’s national, regional and local laws apply. In other words, if you do not know what all five of those things say (in Chinese, no less), you do not know what your employment terms will be. 

Will there be more than one contract to sign with potentially inconsistent, conflicting, or generally problematic terms? This is likely if you end up with a split income, as described below, or if you are a high-end employee subject to a non-compete agreement or other special terms in addition to a standard employee contract. The additional contract(s) may have terms that undermine or exacerbate portions of your basic contract, or that create serious problems in other ways. Be ready for careful analysis and outside legal guidance and recognize that you can propose alterations. The worst thing to do is say, “Well, I trust that it will be OK.” Remember, the key question is, “What could possibly go wrong?” Correct. And note that splitting income will get you in trouble. Big trouble. More on that below. 

Will I have a legitimate work permit and a work visa? Sadly, many companies bring people here on a tourist visa and have them work illegally. This can get you detained, fined, and deported. If the company is not actively working to get documents needed for a visa long before you come to China, they may be planning to rely on your tourist visa, even if they promise they will get you a visa once here. Sadly, I know too many . . . . who get into awkward situations when some of the companies that bring them here don’t properly provide work visas for them. 100% agree. We see this sort of thing all the time, but usually only when they or a friend of theirs calls or emails us after they are put in jail and then deported. Working in China without a work visa is serious business and if you don’t believe me, read Trust Your China Employer. Just Kidding and ponder why the accompany picture to that post is someone in prison.

How will the taxes due to China be paid? Ex-pats are typically told that the company will handle all Chinese taxes. Make sure this is in writing. Also make sure the company will pay taxes on your full income, which leads to the next question. The key here is simple. Make sure all of your taxes get paid. 

Are you going to split my income to evade taxes? Sadly, some companies use a practice of splitting a foreign employee’s pay, with part of the salary being paid to a Chinese bank account, and another part being paid to a bank in the employee’s home country [or Hong Kong], typically using some foreign (non-Chinese) agency to wire money to the home country. That system is convenient for getting money to your home bank account, but the problem is that the employer typically doesn’t report the foreign income to China and only withholds Chinese taxes for the China income. Ex-pats generally don’t understand that taxes aren’t being paid on the foreign income when this happens [actually I think they do understand this!], and it can be a devastating shocker to eventually learn what might have been going on and how much risk and gargantuan penalties you potentially face. There are cases where an employee in China may do genuine work for oversees entities that may justify offshore income, but you should check carefully into this matter and get legal advice before accepting split income arrangements. Do not risk getting into trouble in China, and do all you can to respect Chinese law. If you find your company is not respecting Chinese tax laws, it’s time to resign. For some good guidance, see these articles by Dan Harris at the China Law Blog: “China Expat Pay: Splitting with Hong Kong is 100% Illegal and 200% Dangerous (Part 1)” and Part 2. I cannot remember a single instance in the last five years where split pay was legal but I can remember many instances where expats got in huge trouble when China’s tax authorities learned of their split pay, and most of those instances were in the last two years. China’s tax authorities have gone high tech and they have gotten really good at catching people who do this and they like nothing more than hitting them up for back taxes and interest and massive penalties and collecting all of those under threat of jail. Do not mess around with this. Please. 

Will you respect Chinese Labor Law or will my work contract say I have essentially no rights (e.g., no severance pay, etc.)? Some contracts say that there will be no benefits or rights except for what is mandatory under China’s labor laws. That means no severance pay, for example, and other potential disappointments. This is a tough one because what your contract says is just part of the equation. China’s employment laws might also protect you. 

When I leave, how much notice do you require? If you are asking me to give, say, three months of notice, will you respond to my resignation notice by exercising your right to terminate me with 30 days’ notice with no severance pay? Yes, this absolutely can and does happen, even for employees who have seemingly been loyal and valuable workers for many years. It’s an ugly way to treat an employee, but there are often incentives for some people in the company to lay off a certain number of people, so they might jump at the chance to turn a voluntary resignation into a lay-off that gets them credit for their own KPIs, so I’ve been told by a China expert. The employer will always retain the right to fire you with 30 days notice (some will give less and dare you to sue), so if you are asked to give more notice than that, point out that this is unfair and either change the contract to require 30 days or consider a provision that gives you compensation if they refuse to respect your advance notice and respond by giving you 30 days notice in return. This is 100% true. Beyond even this issue, there is the issue of you being able to maintain your work vis and not getting deported. Our expat employee clients who retain us for employment law assistance when starting their job almost always retain us for employment law assistance when quitting their job as well. China employee terminations are complicated.

How much cash will I need to bring to get started with housing and everything else in China? Many people don’t understand that the company is not going to help you with housing at all or that at most they will provide some monthly stipend toward housing, but only after you have found your apartment and paid the huge fees and deposits required to get started, and then present your company with an official receipt for your first month’s rent. If you are renting, say, a 15,000 RMB/month apartment, you may have out-of-pocket expenses from paying your first month’s rent plus a deposit of two-months’ rent, plus a rental agent fee of 35% of a month’s rent, adding up to a little over 50,000 RMB, or nearly $7,400 in cash before you receive your first paycheck and long before you’ll get your first housing stipend for some portion of your monthly rent. It’s expensive to start working in China. Are you ready? Great (non-legal questions to ask). 

Will housing benefits and other benefits begin as soon as I start, or is there some minimum term of service required before they begin? Which ones actually begin on day one? And can you put that into writing? One friend relied on the promised housing stipend in selecting a nice apartment, more expensive than he might want if paying for it on his own, but only later found out that the significant housing benefit would only begin after several years of service. Ouch. This goes back to your contract and how China treats oral promises. Basically, if you do not have a promise expressly written in the Chinese portion of your China employment contract, it does not exist unless Chinese law expressly provides for it.’

Mr. Lindsay continues his blog post with a bunch of additional (non law related) tips and I urge you to go there to read the whole thing.

Ceramic tile international trade lawyers In just the last few months there has been an onset of trade actions brought by U.S. companies against incoming products of all kinds from China. With all the trade issues involving China and bipartisan anti-China sentiment prevalent in the United States, now is a great time to bring such actions. The international trade lawyers at my firm almost exclusively defend against antidumping and countervailing duty claims instead of bringing them. So I say this not to encourage more such actions, but as a simple statement of fact. This ceramic tile case was no surprise to U.S. trade lawyers as we had been hearing rumors it would be coming for months and I fully expect many more antidumping/countervailing duty cases will be coming down in the next few months.

If you are importing products from China, now is the time to know the trade risks of your imports.

The most recent case to drop came down last week against Chinese ceramic tile producers and exporters and the below explains more about that petition.

— The Ceramic Tile Petition and Background.

On April 10, 2019, The Coalition for Fair Trade in Ceramic Tile (Petitioner), comprised of eight U.S. producers of ceramic tile products, filed antidumping (AD) and countervailing duty (CVD) Ceramic Tiles Petition against ceramic tile products from China.

Under U.S. trade laws, a domestic industry can petition the U.S. Department of Commerce (“DOC”) and U.S. International Trade Commission (“ITC”) to investigate whether the named subject imports are being sold to the United States at less than fair value (“dumping”) or benefit from unfair government subsidies. For AD/CVD duties to be imposed, the U.S. government must determine not only that dumping or subsidization is occurring, but also that the subject imports are causing “material injury” or “threat of material injury” to the domestic industry.

Chinese ceramic tiles have already been the subject of antidumping duties by the European Union, South Korea, Mexico, India, and Pakistan. The additional AD duties in these countries likely pushed Chinese ceramic tile exports away from these markets and resulted in increased export volumes to the U.S. market. Having seen how ceramic tile producers in other countries have used antidumping duties to limit Chinese imports into their markets, U.S. ceramic tile producers are now seeking their own antidumping and countervailing duties to protect the U.S. market.


— The Scope of the Ceramic Tile Petition.

The proposed scope in the petition identifies the merchandise to be covered by this AD/CVD investigation as the following:

The merchandise covered by these investigations is ceramic tile. Ceramic tiles are articles containing a mixture of minerals including clay {generally hydrous silicates of alumina or magnesium) that are treated to develop a fired bond. The subject merchandise includes ceramic flooring tile, wall tile, paving tile, hearth tile, porcelain tile; mosaic tile, finishing tile, .and the like (hereinafter “ceramic tile”}. All ceramic tile is subject to the scope regardless of whether the tile is glazed or unglazed, regardless of size, regardless of the. water absorption coefficient by weight, regardless of the extent of vitrification, and regardless of whether or not the tile is on a backing. Ceramic tile is covered by the scope regardless or end use, size, thickness, and weight. For the avoidance of doubt, subject merchandise includes tiles pressed as very large single pieces, up to and exceeding 5′ x 15′.

Subject merchandise includes ceramic tile produced in the People’s Republic of China (PRC) that undergoes minor processing in a third country prior to importation into the United States. Similarly, subject merchandise includes ceramic tile produced in the PRC that undergoes minor processing after importation into the United States. Such minor processing includes, but is not limited to, one or more of the· following: beveling, cutting, trimming, staining, painting, polishing; finishing, or any other processing that would otherwise not remove the merchandise from the scope of the investigation if performed in the country of manufacture of the in-scope product.

The scope excludes ceramic bricks properly classified under HTSUS 6904.10.00.10 through 6904.90.00.00.

Subject merchandise is currently classified in the Harmonized Tariff Schedule of the United States (“HTSUS”) under the following subheadings under heading 6907: 6907.21.10.05, 6907.21.10.11, 6907.21.10.51, 6907.21.20.00, 6907.21.30.00, 6907.21.40.00, 6907.21.90.11, 6907.21.90.51, 6907.22.10.05, 6907.22.10.11, 6907.22.10.51, 6907.22.20.00, 6907.22.30.00, 6907.22.40.00, 6907.22.90.11, 6907.22.90.51, 6907.23.10.05, 6907.23.10.11, 6907.23.10.51, 6907.23.20.00, 6907.23.30.00, 6907.23.40.00, 6907.23.90.11, 6907.23.90.51, 6907.30.10.05, 6907.30.10.11, 6907.30.10.51, 6907.30.20.00, 6907.30.30.00, 6907.30.40.00, 6907.30.90.11, 6907.30.90.51, 6907.40.10.05, 6907.40.10.11, 6907.40.10.51, 6907.40.20.00, 6907.40.30.00, 6907.40.40.00, 6907.40.90.11, and 6907.40.90.51. Subject merchandise may also enter under subheadings of headings 6914 and 6905; 6914.10.80.00, 6914.90.80.00, 6905.10.00.00, and 6905.90.00.50. The HTSUS subheadings are provided for convenience and customs purposes only. The written description of the scope of these investigations is dispositive.

— The Alleged Antidumping Margins on the Ceramic Tile  

Petitioner calculated estimated dumping margins for China that range from 178.22% to 428.58%.

Although Petitioner alleged numerous government subsidy programs that benefitted the Chinese wood cabinet industries, Petitioner did not allege a specific subsidy rates.

— The Ceramic Tile Exporters and Producers

Petitioner included a list of Chinese Ceramic Tile Producers and Exporters.

— The Ceramic Tile Importers.

Petitioner also included a list of Ceramic Tile Importers.

— Estimated Schedule of Investigations into the Ceramic Tile Antidumping/Countervailing Duty Claims 

April 10, 2019 – Petitions filed

April 30, 2019 – DOC initiates investigation

May 1, 2019 – ITC Staff Conference

May 24, 2019 – ITC preliminary determination

September 7, 2019 – DOC CVD preliminary determination (assuming extended deadline)

November 6, 2019 – DOC AD preliminary determination (assuming extended deadline)

March 20, 2020 – DOC final determination (extended and AD/CVD aligned)

May 4, 2020 – ITC final determination (extended)

May 11, 2020 – DOC AD/CVD orders issued (extended)

 

 

 

China lawyers

Yesterday, Dr. Josh Dorfman published the following post on Linkedin:

Dear presidential candidates: You cannot ignore China! Do you disagree with our current strategy? All of it? Are you sure? You need to be sure. Because I haven’t heard much about it from any of you. It’s sort of like you don’t understand how much the US-China relationship will shape the coming decades. Seriously. A lot. Please, please hire China advisers that value evidence over ideology. Yes, like me. And many much better than me, like Shaun Rein, Jessica Beinecke, Kaiser KuoEric Olander, Bill Bishop, Dan Harris, Samm Sacks, John Pabon, Benjamin Shobert, Paul Triolo, Damien MaAnd I’d be happy to recommend many others. You can’t afford to get China wrong. Seriously. Let us help you. Our proud nation will be forever grateful. Kindest regards, An honest-to-goodness American.

This is followed by a bunch of comments, some of may or may not be tongue-in-cheek. As a lawyer, I am not so good at distinguishing — not kidding.

My first thought upon seeing Dr. Dorfman’s post was to leave a comment asking him to remove me from the list because I am not even remotely qualified to serve in the position for which he nominated me. But I didn’t do that because I worried that without a full explanation as to why I am not qualified, my comment would be viewed as false modesty and I hate that sort of thing. So I have remained silent until now. But this being my blog I can go into great detail why my name truly does not belong on this list and then I can very briefly discuss some of the other names on this list and why I find Dr. Dorfman’s post at least somewhat troubling.

Let me begin by apologizing in advance if I burst any bubbles with this post, but let me start by bursting my own bubble by explaining why I am so wrong for this job.

I grew up in a middle class and integrated neighborhood in Kalamazoo, Michigan. Derek Jeter went to my public high school (after me) and President Obama chose my high school in 2010 for his one high school commencement address. I never understood why Black people should be treated differently than White people and I as a kid I was obsessed with the U.S. civil rights movement and I would read book after book about the lawyers fighting for racial justice. Even then and even more so now, good laws and good law enforcement are integral to a just society and this means I have trouble with countries where rule of law is unimportant. 

In college I majored in French and Political Science, with an emphasize on international legal side of that. My international studies mostly focused on the Middle East. In my junior year, I decided economics was my true love but I was too late to major in it and I fell one (elective) class short of what I needed for the major. I went straight to law school where my favorite class was Antitrust Law because it was so infused with economics. I started my career with Chicago mega-firm, where I practiced antitrust law for 3+ years. Then when antitrust law cases started disappearing for political/policy reasons, I shifted from big-case antitrust cases in Chicago to big-case environmental matters in Seattle. It’s a long story how I transitioned from that into international law but I did and here I am.

But what is the “here” part? There is nothing in the above that makes me qualified to provide presidential level expertise. Do I know international politics better than the average American? Yes. Am I an expert in it? No. Ditto for economics, China politics and foreign policy. What is my expertise right now? What do I know so well that I could do a good job speaking extemporaneously about it for hours? Basketball, food, telenovelas, the practice of law, and how businesses can best navigate the legal issues they face when operating internationally. As a lawyer, I am well trained in how to answer questions when I don’t really know the answer all that well, but if you are going to look to me to talk much about anything but the above, you will likely be disappointed.

And I have always been upfront about this. When I was asked to testify before Congress regarding China in 2015, I made clear before doing so that my perspective would be as someone who deals with China every day on behalf of clients, not as a China expert. Earlier this week, before accepting a panel position at the US-China Business Council’s Annual Meeting I insisted on a telephone call where I could make sure they knew that my perspective would be based predominantly on what I had see happen to my law firm’s clients, not on decades of scholarly study. Even this blog’s mission statement makes this clear:

We discuss the practical aspects of Chinese law and how it impacts business there. We tell you what works and what does not and what you as a businessperson can do to use the law to your advantage. Our aim is to assist businesses already in China or planning to go into China, not to break new ground in legal theory or policy.

We want to engage in conversations with, for and about the person who wants practical information on starting and growing a business in or involved with China.

We tell you more than just that the law is this and this is what needs to be done to comply. We discuss how the Chinese laws as written may say one thing, but our experience on the ground in China dictates something else. We tell you when you need to do more than just follow the law to succeed, and we set out exactly what that something else is. We also will sometimes regale you with stories about the Chinese lawyers with whom we work, the foreign and Chinese businesspeople with whom we deal, and even the places we go. There will be times where our lawyer ethical rules prohibit us from naming names, but we will always work to tell the full story and when we cannot, we will usually make that clear and explain why that is the case.

So yeah, I do know China laws for foreign businesses, but not a whole lot else. Nothing in my experience or education qualifies me to be giving high level China policy advice to a presidential candidate. I would even argue that my distaste for those who do not respect the rule of law makes me even more questionable for this sort of position. Why not list one of the many excellent Chinese law professors whose knowledge China law knowledge is far broader than mine?

And just a quick aside on a point that may or may not be relevant to Dr. Dorfman’s post (but it seems relevant to me), but the Trump administration is using experts to deal with China. The lead trade US trade negotiator against China is Robert Lighthizer, who is widely considered to be one of the best trade lawyers in the country. I mention this because I find myself constantly refuting the idea that the Trump administration has no clue what it is doing in the US-China trade negotiations. You can disagree with US trade policy with China and I won’t fight you on that. You can say President Trump has no clue on most things and I won’t fight you on that either. But the team negotiating trade terms with China are as qualified as you can get.

Back to Dr. Dorfman’s post. Is it clear none of the presidential candidates have a China advisor or have a presidential advisor who is simply unqualified? I have no idea one way or the other, but I can tell you that if I were running for President, I would not be spending my limited funds on a China advisor. Yes, of course China is important. We all get that. But is it important for a presidential run? Is the voting public clamoring for more information on China? No. Is the voting public clamoring for a change in the United States’ China policies? No. Per the most recent Gallup poll, China shows up as the United States’ #2 greatest enemy, second only to Russia. Most of my law firm’s clients that do business with China believe China does treats foreign businesses unfairly. Those running for President did not get to where they are by not understanding which way the wind is blowing and they no doubt all know that it is blowing against China right now and they are going to either ride that breeze or just ignore it, at least until they are elected.

Not only am I not qualified to serve as a China expert for presidential candidates, others on the list appear equally unqualified. Some are businesspeople whose China expertise appears to start and stop with how to make a widget in China or sell one there. For all I know they are foreign policy experts but nothing in their past indicates this. Even worse, I think at least one of the people listed is not U.S. citizen and has extreme anti US views. Someone like this is far more likely to harm a presidential candidate than help.

There are though some people on the list I know who are truly qualified to provide China policy advice and I would be remiss if I didn’t explicitly call out my good friend Ben Shobert as fitting into this category. Ben not only knows China he studies China and thinks about China and he discusses China all the time with others who know and think about China and he also thinks about and is actively involved in local and national and international politics. Ben has even written a very thoughtful book about China. Ben’s China expertise goes well beyond asking how to increase widget sales or how to protect a foreign company’s intellectual property from China; it involves the sort of big picture issues from which a President would benefit. And though I do not know Dr. Dorfman, his credentials and his background lead me to believe he himself rightly belongs on that list even though many of us others on there do not.

Perhaps most importantly, what does it mean to value evidence over ideology when it comes to China anyway? Is Dr. Dorfman saying the evidence on China is disputed, because I don’t think it is. Who seriously disputes that China steals IP and discriminates against foreign companies? Who seriously disputes that China bullies its neighbors? The evidence on these things . rises to what we lawyers call a summary judgment level, meaning it is so clear no trial on it is necessary.

Is China an enemy of the United States or not? How should the United States deal with China in the short and long term? These sorts of questions cannot be answered with evidence as they are inherently and necessarily infused with opinion and policy. Is Dr. Dorfman saying all decisions about China can and should be made based on evidence? I am not a foreign policy expert but that does not make sense to me. U.S. foreign policy with other countries is based on things like what is important to our interests and how should we act so as to maximize our interests, not on something like evidence. Does Dr. Dorfman believe the “China experts” on his list are ideology-free, because I am not and I doubt any of the others are either As for me, with every year I deal with China my negativity towards China increases and this is based both on the repetition of the conduct I see (i.e. cold hard evidence) and on things changing for the worst in China pretty much every year for at least the last five years. I do not get the sense this is the sort of evidence Dr. Dorfman wants from his “China experts.” Is it?

I truly don’t get it.

I am going to link this post to Dr. Dorfman’s post to give him and everyone else on there a free and fair opportunity to respond either here or there.