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 we usually 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, which we generally do on Fridays, like today.
A mainstream media reporter called me yesterday for my ideas on the long-form piece he is writing, tentatively titled “The End of China.” This reporter plans to write about how China’s own actions are causing it — deliberately or not — to rather quickly decouple from the United States and will more slowly lead to its decoupling from Europe, as well. His big ask of me was to give me whatever evidence I had of this decoupling and he wanted more than the usual “Western companies are moving their manufacturing out of China” stuff.
I thought and I thought and then it hit me. “Litigation and arbitration,” I said. “Disputes.” Whenever times are hard companies are much quicker to sue and much less reticent to do so. Times are hard right now as between foreign companies and China, and foreign companies that a year ago would not have sued because they were either (a) making money by selling their products or services to China or (b) saving money by having their products made in China are calling our international dispute resolution lawyers to ask about bringing lawsuits against Chinese companies. And I know for a fact it is not just our law firm and it is not just lawyers in the United States that are getting these calls. Our firm’s Spain lawyers are seeing an increase in companies wanting to sue, and I keep hearing from other lawyers in Europe about an increase in lawsuits.
Most tellingly, I am hearing this exact thing from Chinese law firms that focus on litigation and arbitration. A few weeks back I had a really good conversation with an expert litigation lawyer at a great Chinese law firm on the other side of a lawsuit. I asked this Chinese lawyer whether his firm had been seeing a decrease in international work from its Chinese clients and he said that they were. I then asked him if this concerned him and he said that it did not. He proceeded to tell me that his law firm’s decreased international transactional work had already been greatly surpassed by its increase in international litigation and arbitration, to the point that he wasn’t even sure they could take on much more litigation/arbitration without bringing on more lawyers experienced in handling international disputes. He then talked about how there is a huge demand for such lawyers in China these days and he expects disputes to keep increasing for the next 2-3 years. I thought for a moment and then agreed with him.
So buckle up everyone and get ready for many more lawsuits between Chinese and foreign companies because they are most definitely coming and fast. And that is yet another sign of “The end of China.”
What are you seeing out there?