Whenever I am asked to review a contract between a US company and a China company, I nearly always go straight to the dispute resolution clause.

Much of the time when I am asked to review such a contract, it is by someone who did not use our law firm to draft the contract and is now asking us to review their contract because something has gone wrong.  I review the dispute resolution clause first to see if there is even any point in determining the strength or the weakness of the US company’s claims against the Chinese company. If the contract calls for litigation in the United States, before a US Court and the Chinese company has no assets in the United States, the quality of the case just went way down.

The reason is that China does not enforce US court judgments. So what this means is that if your contract requires that all disputes between you and your Chinese counter-party must be resolved in a US court, you will be required to sue the Chinese company in a US court.  But since China will not enforce any judgment that you receive from the US court, your winning in the US court will likely be meaningless.  Getting a US judgment against a Chinese company with assets only in China is of no use.  Getting a US judgment against a Chinese company that has assets in the United States or in some other country that will enforce a US judgment (Korea and Canada spring immediately to mind) might have some value.

Way back in 2006, in Enforcing Foreign Judgments In China — Let’s Sue Twice, we wrote about how a typical phone call goes when someone calls us for help enforcing their US judgment in China:

Caller:  I have a two million dollar judgment against Chinese company X in China, can you help me enforce it?

Me:  Is it a default judgment here in the United States?

Caller:  Yes.

Me:  Chinese courts do not enforce United States’ judgments and they don’t give any credence whatsoever to United States default judgments. Did you discuss this possibility with your U.S. lawyer before you sued here in the United States?

Caller:  [long silence] …. Yes.  He told me getting a judgment here couldn’t hurt?

Me:  Did your lawyer charge you to get it?

Caller:  Yeah.  I had to pay him and I had to pay all sorts of people to get that company served in China.

Me:  Sorry.

So much of the time in your China contracts, it will make sense to draft a dispute resolution clause with your Chinese counter-party that calls for disputes to be resolved by a Chinese court (or sometimes by arbitration in China or outside of China).  More lawyers are catching on to this and we are seeing fewer contracts that call for US court jurisdiction.  But we are now starting to see contracts that are getting too specific about the Chinese court in which disputes will be resolved.

And that itself can be problematic.

The reason for our concern about overly specific Chinese court jurisdiction provisions is that the Chinese courts tend to ignore any attempt by contracting parties to dictate where a matter will be litigated. Instead, Chinese courts typically determine the proper jurisdiction for a dispute based on the nature of the claim, the amount of the claim, the location of the parties, and the location of the witnesses to the dispute.

If your choice of Chinese court jurisdiction is wrong, the Chinese court will — at best — ignore it. But at worst, your mistake could raise questions about the validity of Chinese Court jurisdiction or create other confusions.  The whole reason for putting in a dispute resolution clause is to avoid the expense, the time, and the uncertainty of where and how to resolve any disputes.  There is therefore no reason to add language that appears to increase certainty, but which in practice will have exactly the opposite effect.

For more on positioning yourself to be able to collect from a Chinese company in litigation/arbitration, check out the following:

Yesterday, at lunch, a couple of lawyers and I were discussing choice of law provisions.  I know that makes us geeks, but what can I say?  The discussion started when I talked of how I had been receiving an increasing number of “draft contracts” that called for applying “China and US law” to any dispute.  I told of how I had recently taken it upon myself to ask the client what that meant and of how no client could tell me.  Frankly, these provisions make no sense at all.  What does it even mean to apply two country’s laws at the same time?  What if there is a conflict between the two laws?  Is the court supposed to just pick one or try to merge them into one?  The bottom line is that putting this sort of choice of law provision in your China contract will only increase ambiguity and with it your costs.

We then talked of how we are seeing another recent trend, which is to provide that if the American company sues the Chinese company, it can sue in a US Court with US law applying, but if the Chinese company sues the American company, it can sue in a Chinese Court with Chinese law applying.  These provisions sometimes make sense, but if the Chinese company does not have assets in the United States, there usually is no point in suing there.  See Suing Chinese Companies In US Courts. The Pros And The Cons.  The other issue with this sort of choice of law provision is that it makes drafting the contract more complicated and expensive because the lawyer doing the drafting most figure out the laws of two countries (not just one) and then draft accordingly.

We then discussed our pet peeve: the contract that calls for disputes to be resolved in a Chinese Court but then calls for application of US law, or vice-versa.  The subset of this is arbitration in China in Chinese, under US Law or the opposite.  These sort of choice of law provision generate uncertainty and added costs.  Is a Chinese Court really going to enforce US law?  What US law?  US Federal law or the law of the US State with the most contacts or the law of the US State from where the US company has its head office or the law of the US State where it is incorporated?  And how will the Chinese Court familiarize itself with US Law?  And if it were to apply it, what would it even look like?  We have heard of Chinese Courts literally throwing cases out because they provide for application of US Law.

We recommend dancing with the one that brung ya.  By that we mean that if your dispute is going to be resolved in a Chinese Court or before a China-based arbitral body, it will almost always make sense for you to go with Chinese law in your contract.  And the converse is true if your disputes will be in a US Court or before a US arbitral body.

Any questions?

Clients, potential clients and/or the press are always asking our China lawyers what foreign companies doing business in China need to know to stay out of legal trouble. Since a client recently asked me to speak at his company about the legal issues of which it should be aware, I formulated the below checklist. This list is meant as a starting point and it is in no way exhaustive.

  • Are You Operating Legally?  China has all sorts of requirements for doing business in China. The basic (non-technical) rule is that If you are going to be doing business in China for anything more than weeks at a time, you probably need to form a legal entity to do so. This entity can be a WFOE, a JV, or a representative office. It is important to note that some businesses that are perfectly legal in the United States or in Europe are illegal in China.
  • Do You Have a Good Contract?  It almost always pays to have a written contract and it is usually best to have this contract be in Chinese. Generally speaking, if something is not spelled out clearly in your contract, there is a good chance a Chinese court will find it does not exist. If you want your Chinese counter-party to abide by your contract, you will likely want disputes resolved in China.
  • Are You Protecting Your Intellectual Property? Your intellectual property (IP) registrations in your own country do not generally extend to China. To secure protection of your trademarks and patents in China you must register them in China. China is actually pretty good at protecting trade secrets covered by a contract calling for their protection.
  • Is Your Company Bribing Anyone?  The United States vigorously enforces its Foreign Corrupt Practices Act (FCPA), which penalizes improper payments to foreign officials by US companies.  In certain situations, US companies can be liable under the FCPA for payments made by their Chinese partner.  Canada and most European countries have their own somewhat similar corrupt practices acts, as does China.
  • Are You Complying With Customs Laws?  A company recently called me about my law firm drafting sales contracts for their technology product. My first question to them was whether the US would even allow them to export their product to China. This question had never even occurred to them, but it turned out that exporting their product to China would be illegal under US law. Years ago, I was approached by a client ready to ship product to North Korea that would have violated US prohibitions on doing business with that country. The client was simply unaware of the law. Some products (certain types of software are a good example of this) can be sent to China only with a validated license. On the flip side, many products require special approvals to be imported into China and some cannot be imported at all.
  • Are You Violating Any Antitrust/Tax/Environmental/Labor Laws? Sorry to group all of these together, but if I analyzed them separately it would take ten blog posts.  Just make sure that you recognize that doing business internationally and with China means that you must always be thinking of these things and that Chinese laws on these can be very different from those to which you are accustomed.

Did I miss anything?

The China Daily recently did an article, entitled, “Business lawsuits in sharp increase,” on how lawsuits involving foreign companies are up ten percent in the last year.  The article ascribes this increase in litigation to more foreign companies coming into China and to the economic downturn. Both of those things may be true but I also think that the increase is due in part to companies getting more comfortable with the fact that it is possible to come out ahead on Chinese litigation.

I am tired of hearing people (including lawyers) tell me that there is no point to litigating in China because it will be so expensive and “they have no laws there anyway.” Wrong.  And Wrong. Litigating in China is typically costs less than litigating in the United States and China does have laws. Mind you though, the laws and the judicial decision-making will be different.

Let me explain.

On the most basic level, the decision to litigate in China is really no different than the decision to litigate anywhere else. Is it worth spending approximately X dollars to pursue a lawsuit in which you have a Y percent chance to win and likely collect Z dollars? The answer will depend on the X, Y and Z variables and it is those that I am going to analyze in this post.

The X Variable. Litigation Costs.

Litigating in China is quite different from litigating in the United States. Under China’s civil law system, a plaintiff generally must have the evidence it needs to prevail before it files suit.  This is the case because it is rare to be able to get evidence from the defendant through American-style discovery.  This means that you will not have to pay the massive costs of American-style discovery and this also means that your case likely will go to trial much faster than if it were in the United States.

One thing I have found though is that once you sue a Chinese defendant, the chances of them settling are quite low. I have heard many explanations for this but I will save those for another day. Suffice it to say though that you should not sue a Chinese company in China unless you are prepared to take your case all the way through trial.

Chinese courts typically require that documents generated outside China be notarized and then authenticated/apostilled by the Chinese embassy or consulate. Securing an apostille on documents is not terribly difficult for those who have done it before, but it can slow things down a bit and also can raise costs if there are a lot of documents requiring this.

Foreign lawyers and foreign law firms cannot litigate in Chinese courts. There are plenty of excellent Chinese litigators but if you are going to require your lawyer be both excellent and fluent in English, you almost certainly will need to pay considerably more.

One of the biggest unexpected costs of litigating in China is the court fees, which you should figure will run you at least 2.5% of the amount of your claim.  American litigants tend not to be aware of fees like this and this causes them to get into trouble.  I once helped represent an Americna defendant in a Korean case (Korea too requires the plaintiff to pay a portion of its claim as a litigation fee) where the American plaintiff (in an American lawyer kind of move) asked for something like $30 million dollars even though its chances of getting anything more than $2 to $3 million were pretty much zero.  I cannot remember any fee numbers but what I do remember is that the $30 million sought by the plaintiff required it pay a large amount in fees and that led to the plaintiff’s American law firm firing the Korean law firm for not having explained how all of this works.

If you are the plaintiff in a China case, you may also want to spend money to try to freeze (or preserve) the defendant’s assets to prevent the defendant from dissipating them to prevent you from collecting on any judgment you might get. Securing a preservation order typically requires a large deposit, generally based on the amount you are seeking to freeze. It is sometimes possible to use a bonding company for the deposit.

Very generally speaking, the prevailing party in China gets much of its costs back but none of its attorneys’ fees.

The Y Variable.  Chance of Winning.

It is very difficult to speak generally about the chances of prevailing in a Chinese lawsuit so I will keep this section mercifully brief by commenting on three things that I have noted about Chinese courts.

One, they tend to base their decisions less on the law and more on the equity than do US courts.  This is not necessarily good or bad, but it is something you should fully understand before bringing a lawsuit in China. If you are suing a Chinese company that said it would pay you a million dollars and then it did not, you will probably win. If you are suing a Chinese company that said it would do A but then was unable to do A because the price of doing so tripled and if it had done A it would have meant having to terminate 100 employees to cut costs, your chances of prevailing just went down.

Two, politics and corruption are typically going to be less of a factor than you think, particularly in places like Beijing and Shanghai. Your $1 million contract dispute is just not going to draw any political attention unless there is something very unusual about your case.

Three, your case is going to depend on the documents way more than on testimony.

The Z Variable. Amount You Are Likely to Collect.

Again, it is difficult to generalize here, but there is one thing that bears mentioning. Chinese courts are far less comfortable issuing large verdicts than American courts and this is particularly true when it comes to lost profits.

For more on suing Chinese companies, check out the following:

Chinese companies are more and more often requiring a China venue dispute resolution clause. In other words, they are refusing to sign contracts unless they provide for disputes to be resolved in China. In some cases, you will be better off in a Chinese court and in other cases you will be better off arbitrating in China. We typically look at the following factors, among others, in deciding whether to go with arbitration or litigation:

  • The nature of likely disputes;
  • The importance of being able to preserve evidence;
  • The likelihood of needing injunctive relief’
  • The quality of the court being sought by the Chinese party or of the court most likely to hear the case;
  • The power/influence of the Chinese party.

In those instances in which we write arbitration in China clauses for our clients, we typically push for the following:

1) A CIETAC (China International and Economic Trade Arbitration Commission) or BAC (Beijing Arbitration Commission) arbitration.  These are the two most highly regarded and internationalized of China’s arbitration commissions. The Chinese companies virtually never fight us on this point.

2) That the arbitration take place in Beijing or Shanghai. These two cities generally have the most experienced commissions and arbitrators. The Chinese companies often fight us on this point, but usually not very hard. 

3) That the arbitration be conducted in English. Note that if you do not specify a language other than Chinese, it will be in Chinese. The Chinese companies often fight us on this point and sometimes they fight very hard on this point and sometimes they fight to the point that it can be a deal breaker.

4) That at least one of the arbitrators not be a Chinese national. Surprisingly, we usually do not get all that much resistance to this from the Chinese counter-party.

There are all sorts of other issues that can come into play when writing a China arbitration clause, but if you are at least sure to cover the above four, you likely will be giving yourself at least a fighting chance. 

What do you think?

Yesterday, I did a post, entitled, “Taking On China Patent Infringement At Home,” extolling the success of a U.S. company that sued a Chinese company in U.S. Federal Court for patent infringement. Today, I came across a good article on law.com on a U.S. company, 3M, that successfully sued a Chinese company in Chinese court for patent infringement. 3M has been in China since 1984, when it became the first U.S. corporation to set up a wholly owned subsidiary (WFOE) there.

3M learned that Shanghai-based Dasheng Health Products Manufacture Company, Ltd., was selling look-alike respirators in Australia that “violated at least two of 3M’s Chinese patents, one covering the design and a second on the structure of the mask.” Rather than pursue Dasheng directly, 3M went after the Australian mask importer, who agreed to cease importing the infringing product. 3M then decided to let the matter drop. But after more infringing masks, traced back to Dasheng and two other Chinese companies, started appearing in Europe, 3M decided it needed to go after the source.

3M’s St. Paul, Minnesota, based in house legal team wanted to sue Dasheng in civil court, but “the company’s business side was wary.”  The legal team eventually prevailed:

“This was not like the guy on the street selling DVDs,” says Trussell, “This is an established business where we thought it would be more important to have what closely approaches a U.S. trial.” After several weeks of wrangling, the company’s legal and business managers agreed.

Before filing its lawsuit, 3M had to compile “a huge amount of documentation about its patents” and, as is standard for Chinese litigation, “many of these papers had to be authenticated by the nearest American consulate.”  Once the Chinese court accepted the documents, 3M’s China lawyers drafted the complaint in English, which was then reviewed by 3M lawyers in St. Paul, and then translated into Chinese.

3M filed the complaint in August, 2005 in the Shanghai Intermediate People’s Court. Dasheng responded by denying infringement.  The Shanghai court’s IP (intellectual property) division scheduled the case for a March, 2006 trial. Trussell liked the speed of the trial, but did not like how in Chinese litigation matters “it’s almost impossible to demand information from the other side.”  This lack of discovery made getting Dasheng’s financial records “needed to prove significant damages, like lost profits, nearly impossible.” 3M had no trouble proving infringement but proving Dasheng sold the product would require an “unbroken chain of sale from Dasheng to the final distributor” in Europe.” 3M requested the court inspect Dasheng’s factory, where it found serial numbers coinciding with those in the catalog. This convinced the judges of the connection between Dasheng’s manufacturing and the European sales, but without Dasheng financial information, 3M could not prove the extent of the sales.

The trial took only two hours and within a month, the court issued its ruling finding the respirator Dasheng sold had infringed 3M’s patents and awarding 3M approximately $31,000 in damages:

The case is a lesson to foreign companies, many of which still neglect to file Chinese patents. It’s also notable for having gone relatively smoothly: This wasn’t the first patent win by a foreign company, but it was one of the easiest. There were no decrees passed down from the government, no high-powered IP specialists riding in to save the day. The case didn’t grab headlines, like Pfizer’s recent defense of its Viagra patent or Starbucks’ January trademark win. And even though it involved a foreign company, the litigation was handled just like any other in the Shanghai court. That makes it a victory for all foreign companies operating in China, as well as one for the Chinese courts, often slammed for being weak enforcers of foreign IP rights.

After the ruling, Dasheng and 3M settled the case with Dasheng paying the damages and agreeing not to appeal to the Shanghai Intermediate People’s Court, and with 3M covering its own legal fees.  3M rightfully describes this settlement as “so close to outright victory.” The “infringing masks have not since been found in Europe, China or Australia.”

3M laid the groundwork for its China court success with its China patent filings years ago:

Most importantly, 3M had well-written, straightforward Chinese patents. “A lot of companies may not have made the decision five or 10 years ago to build a patent portfolio,” says Trussell. 3M had the foresight to file even before it had a significant business in the region. The key patents covering the respirator masks were filed in 1997.

The biggest problem faced by most companies in China is a lack of patents.  In China, the top foreign filers of domestic patents are mostly Asian businesses: Samsung Group, Matsushita Electric Industrial Co., Ltd., and Sony Corp. topped the list last year. The only American company in the top 10 was IBM Corporation, which ranked sixth.

Many of the midsize- and smaller-sized foreign companies either do not file patents in China, or file “shoddily written patents with serious defects.”

Without patents, filing an infringement case is nearly impossible. When Intel Corp. patent counsel Hongbin Wang worked at GE Healthcare Bio-Sciences, the company discovered that a Chinese competitor was infringing a U.S. patent. “That’s not a patent infringement,” Wang remembers telling his managers. “There is no [Chinese] patent.” The technology was originally owned by Amersham plc, which GE acquired in 2004, and Amersham hadn’t filed any Chinese patents. Wang and his colleagues used the mistake to convince GE to file more in China.

Chinese companies happily exploit the thoughtlessness of their competitors. “Some Chinese companies tell me their slogan is: ‘If you do not respect your IP in China, we will not either,'” says Jones Day’s Wang. If the multinationals don’t file patents, their Chinese competitors will. “[In] two cases here, the local companies filed our client’s U.S. publication [at the Patent and Trademark Office] literally without even having any change,” says Wang.

The article goes on to note that companies are increasingly filing their patents in China and the numbers bear this out; patent filings were up 36 percent in 2005 as compared to 2004.

About a month ago, we did a post, entitled, Whither The China Patent Filing, on the pros and cons of China patent filings for small companies doing business in China, in which we said the following:

I am less enthusiastic about filing for patent protection in China than I am about filing for trademarks. The decision on registering your trademark in China is easy. If you have something valuable that can be protected by trademark, register your trademark. It is that simple. China’s recent record on enforcing trademarks is already good and getter better and the cost of enforcing trademarks is generally relatively low.

Patents are a whole ‘nother story.

The cost of filing for a patent in China is usually more than for a trademark and the risk of rejection is also quite a bit higher and far less predictable. China’s courts are not particularly well educated on patent protection, nor are they terribly zealous in this task. On top of this, I do think that filing a patent does increase the likelihood of someone being able to copy that which you sought to patent and the ease of their doing so. The cost to enforce a patent in China, once violated, can be quite high.

All of this means that the decision on whether to seek patent protection in China is anything but simple and it generally must be made on a case by case basis. If you are Pfizer and you are looking at patenting something as valuable as Viagra, the choice is simple and clearcut. You do it and you do whatever it takes to enforce it. But if you are a small company with a product you hope will generate $1 million in profit from Chinese sales, and you know you are not willing to spend large sums protecting your patent should it be violated, you will need to fully analyze the situation before determining how to proceed.

All this still holds true.

The Chinese Law and Society Blog just did an interesting post, entitled Court said no to government [link no longer exists]. The post describes how a Ningbo Intermediate court overturned a lower court to hold that a local government acted illegally in “forcefully demolishing a resident’s house.” The post concludes by calling for “Thunderous Applause!”

Thunderous applause is not warranted.

The post has this to say about China’s courts and its relationship to the government:

As we all know, Chinese court is actually an affiliate of the government because the latter funds the former and this is the case from the central government downward to the bottom local level. Courts have been viewed as an instrument by the government to enforce and implement governmental policies, as has been true from the establishment of the national institutions.

The post notes there have been some cases where courts have “boldly and courageously” said “no” to government misuse and abuse of power and these cases have attracted much media attention. According to the post, these anti-government rulings typically occur at the appellate level because that court is “hierarchically higher than the government” involved in the dispute.

In this particular case, the Yuyao municipal planning bureau ordered Zhu Lifeng to tear down an illegal structure he had erected “around his residential area.” Zhu’s lawyer argued that the municipality violated the PRC Municipal Planning Law which mandates court approval for a demolition if the party whose property is up for demolition seeks court intervention. In other words, the government cannot just go ahead and demolish the property with the case pending. The municipality ignored that rule here.

China Law and Society sees the Court’s decision as significant:

The court’s decision is of great significance. The whole nation is still on the heat and craze of land enclosure often leaving the farmers or urban citizens crying in grave grievance. The situation is especially acute in Zhejiang province to which Ningbo City belongs since this province has the most dynamic economy which has posed high demand for industrial land.  According to the report entitled “a great danger to lawyers” released by the Human Right Watch, there has constantly seen protests and clashes between the local farmers and the local government which often forcefully seizes the farmer’s lands without just compensation.

Given the situation described above, the court’s decision is definitely precious and valuable in that it may convey a signal to at least the local government that they can not use their power without constraint and they should really discharge their duties according to law.

Thunderous applause!

Though I agree this was a good decision and one that should inspire some optimism, I am not clapping.

I do not view the decision as terribly significant. First off, the problem with the relationship between the Chinese courts and the Chinese government goes way beyond funding. The problem is that the Chinese courts are the Chinese government. China’s local courts are essentially the local government and things just move up from there. Chinese courts are not autonomous and until they become autonomous, decisions against the government will be unlikely. Until anti-government court decisions do not require judges to act “boldly and courageously,” China’s legal system will always greatly favor the government.

Second, I see this decision as more procedural than substantive.  Near as I can tell (and this is strictly from reading Chinese Law and Society’s blog post), the decision said nothing about the legality of property demolitions or seizures. It merely said that if the government is going to engage in such actions it must follow the rules for doing so.

I am often posting on the fairness of China’s courts for business disputes. See The Yin And Yang And The Apples And Oranges On China’s CourtsChina Courts And Abuses Of PowerChina’s Courts Are Fair, and “China’s Courts are Fair, Part II. But at the same time, I do not believe that cases involving the Chinese government as a party can be fairly handled. Yes, no doubt, China has countless eminently fair judges. But until China’s courts become independent from its government I will withhold my applause.

I would also advice foreign companies doing business in China to take heed of this court decision and to realize how it can impact you. Our China Lawyers are always advising our clients not to violate Chinese law even if given permission/encouragement to do so by local government officials. We are always saying that higher levels of the Chinese government (like Beijing) can and often do audit what lower level governments are doing and when they find illegality, they typically void the transaction.

What this means for you is that if you are operating illegally in China (even if you are doing so at the behest or approval of a local government official) you can and probably eventually will be shut down by a more powerful governmental oversight body and you will have no recourse through the Chinese legal system. Our China attorneys have seen this happen to foreign companies many times.

In an article entitled, “China moves against local meddling in court cases,” The Peoples’ Daily reports that the Chinese government is increasing its efforts to prevent local party interference with Chinese courts.  A notice jointly issued by the Central Commission for Discipline Inspection of Communist Party of China, the Supreme People’s Court, and the Ministry of Supervision “orders” courts to “report swiftly any meddling by local cadres in the enforcement of court rulings.”

This is a good sign.

Though we often argue that China’s courts are fairer in their handling of commercial legal disputes than widely believed (see “China’s Courts Are Fair“) we readily admit they are not always fair and that local party interference is an impediment.  In the commercial context, local party interference usually manifests itself at one of two points in the judicial process: in influencing the decision itself and in the enforcement of any judgment or court order.  Or, as the People’s Daily so bluntly puts it:

Party officials have been found abusing their power to illegally meddle in or hinder the execution of court rulings, seeking to protect vested personal or departmental interests.

Some officials refuse to cooperate with local courts despite their legal obligations in the execution of court rulings, while others have been known to incite riots to resist the enforcement.

In other words, sometimes you can get a court order requiring a company to pay damages, but interference from local officials may prevent the prevailing party from ever actually being able to collect.  Fortunately, China is not completely monolithic and so it is often possible to circumvent local interference by taking the matter to a higher, less local, court, or by securing the assistance of some other, more powerful entity.

The article goes on to state that the joint notice calls for judicial officials “to build a report system, under which all local courts should report promptly all kinds of interference from local cadres to their party committees, or to courts of higher levels if necessary” and for “local courts to pass on allegations and evidence of illegal interference to discipline and supervision departments.”  The article concludes by cryptically stating that “officials involved in these cases should be held accountable, according to the system.”

I have always viewed China’s efforts to clean up the environment and to clean up its court system as similar in many ways.  Recently, in a post, entitled, “Is China Going Green, Part VIII? — Well The Wall Street Journal Says It Is So You’d Better Believe It,” I had this to say about Beijing’s efforts on the environmental front:

I am constantly blogging on how China is serious about improving its environment, most recently in this post, “Is China Going Green? — Part VI — So Green It Is Going To Hurt” a couple days ago.  China is serious about the environment for one simple reason.  It wants to keep its citizenry satisfied because satisfied citizens do not to take to the streets. Clean air and clean water are the basics citizens expect from their government.

I often add that the big question regarding China’s environment is whether Beijing will be able to get the local officials on board.

The same holds true for cleaning up China’s judicial system.  Beijing is serious about wanting a fair and effective court system (at least for business litigation matters) and most of the judges and the lawyers want that too.  The real question is whether Beijing will be able to get the local officials on board.