October 6, 2009
Can China Lead a Recovery? Right...
More pie-in-the-sky dreams about a consumer economy in China. Note this paragraph, buried in the article:
It remains unclear whether the Chinese have abandoned their traditional caution [to spend]. "Over the past decade or so, the growth of China's household consumption has been outpaced by fixed investment growth and exports, and consumption as a percentage of GDP is low and has been on the decline," said Morgan Stanley analysts Qing Wang and Steven Zhang in a report last month.
The topic is a long-standing Western fantasy about which I have written often over the past 10 years on this blog and will not spend any more time on.
Posted by Richard at 2:23 PM | Comments (0)September 22, 2009
EVENT: U.S.-China High Technology Working Group
On September 29, 2009, the U.S.-China High Technology Working Group, sponsored by NAM, MOFCOM and the Dept of Commerce, will hold a "Public-Private Sector Dialogue," described as follows:
The U.S.-China High Technology Working Group (HTWG) was established to facilitate high-technology exports to civilian end-users in China, in accordance with U.S. export control requirements. In furtherance of this effort, the Department of Commerceʼs Bureau of Industry and Security (BIS) and the Peopleʼs Republic of Chinaʼs Ministry of Commerce (MOFCOM) are pleased to announce that the 2009 HTWG meetings will include a public-private dialogue on Tuesday, September 29, 2009.
In this public-private HTWG event, participants will focus on identifying barriers to U.S.-China high technology trade, particularly in two of the largest categories of bilateral advanced technology trade: civil aviation-aerospace and information technology. This all-day event will provide ample opportunity for two-way dialogue. The principal goals of this dialogue are to offer an opportunity for U.S. and Chinese companies to interact with each other and with government officials directly on these issues, and to learn from individual U.S. and Chinese companies about the ways in which the two governments can further support high technology trade for civilian end-uses in China.
A number of interesting speakers. In light of the tire tariff decision, this meeting might prove worthwhile if only to witness the sparks that might be generated.
I attended something similar to this in the mid-1980s when China was first eagerly developing its approach to technology transfer. And the US was eagerly divesting itself of its design and manufacturing capabilities in a vast swath of technology products. How the world has changed...
Note the last sentence of the indented paragraphs: "...for civilian end-uses in China." Ah, yes, creating the consumer economy of China. When will they wake up? Better asked, will they? What of American technology manufacturing?
Register here.
Posted by Richard at 1:50 PM | Comments (0)September 10, 2009
Patent Attorney Position, Head of Patents, China
[Editor's Note: As a public service, Asiabizblog is pleased to post the folllowing opportunity.]
By way of introduction, I am a principal and founder of The PeterSan Group (www.petersan.com
The candidate will provide patent support for facilities and personnel in Shanghai, and provide further patent support as necessary for the remainder of Northeast Asia (NEA). At least eight years of experience directly interfacing with clients in the preparation and prosecution of patent applications; clearance assessments and related counseling; agreement work; due diligence; inter-parties dispute matters, e.g. oppositions, invalidity proceedings, reexaminations and litigation; patent strategy development and general client counseling. The candidate must be fluent in English and have significant corporate experience working for a multinational company. Full qualification to practice in the EPO or the US or a comparable jurisdiction will be required, along with a desire to live and work in Shanghai. A degree in chemistry, chemical engineering or the food or life sciences (biology, microbiology, biochemistry or comparable degree) is required. Excellent oral and written communication skills are needed. Works independently, thinks strategically, acts assertively when necessary, and handles ambiguity. The candidate will be expected to develop strong relationships with personnel throughout NEA, particularly with the scientists and R&D leadership in Shanghai.
The ideal candidate will be fluent in Chinese with work experience in Europe or the US for a multinational corporation. At least twelve years of directly relevant work experience would be highly desired, and international experience living outside the candidate's home country would be a plus. An advanced degree will be favored, and relevant consumer market segment experience would be helpful. Experience with the protection and registration of designs in multiple jurisdictions would also be helpful. Demonstrated leadership skills will also be considered favorably. Lastly, if the candidate is not currently registered to practice in China, then a willingness to become qualified in China would be desirable.
If you should know of anyone who you think might be interested in learning more about this opportunity, I urge you to contact me at your earliest convenience.
Thanks, in advance, for your time and efforts.
Sandy Friedman
Managing Director
The PeterSan Group
212/981-4500
sfriedman AT petersan.com
August 31, 2009
Ralph Lauren in China -- 15 Stores to Open -- Significant IP Challenge
As his employer plans to roll out 15 stores in China,
George Hrdina, president of Ralph Lauren’s Asian business, said in an interview in Hong Kong. “We do more Ralph Lauren business on the island of Manhattan, New York than we do in Hong Kong and China.”
What an extraordinary public statement! Generally, execs are loathe to give any indication of sales volume in specific locations. One wonders if the company breaks out numbers by geography in its financial statements? As luxury sales slow in the West, the paradise of China passes through the minds of sales execs who must raise their numbers or, at least, stanch the bleeding.
Luxury brand Gucci plans to open two to four more stores this year in China, after opening its 28th outlet yesterday. Gucci chief executive Patrizio Di Marco is undeterred by uncertainty in the global economy as China is set to lead future luxury consumption.
Counterfeit Lauren has been a favorite of consumers (both Chinese and foreign) in Greater China for 25 years. How, other than by purchase in a Lauren store, can a luxury buyer ensure that what he's purchased is the real thing? And what, frankly, is the difference between what passes, often, as superb fake and the genuine?
In 1988, a garment maker in Taiwan showed me both and I could not tell the difference. Granted, I was not in the business and did not have the eye or the touch that experience brings. The maker told me that the genuine shirt was priced at $14 ex factory; the fake at $7. Some of the counterfeits brought into the U.S. today are of high quality and priced to sell fast. The problem is bigger than ever before. The potential counterfeit market is now China, not merely Taiwan, Hong Kong, Korea and the foreign tourists who visited those tiny states.
Perhaps there is, other than price, little difference in the well-made counterfeit product. Some name brand contract factories in China -- I will not specify what brand or product -- produce extra for their own account for sale to the domestic market, even in the department stores. China does not present, if I may suggest, a marketing challenge for Lauren -- everyone knows Polo by now -- but a management challenge, specifically of its intellectual property. Daunting, in the face of weak IP enforcement and the ubiquity of excellent forgeries. The company must be well aware of this. Their strategy is worth watching as it plays out over the next few years.
Posted by Richard at 1:46 PM | Comments (0)August 24, 2009
Federal Court Enforces Chinese Judgment Against American Company
The Central District of California has held that a money judgment of $6.5 million against Robinson Helicopters issued by a Chinese court is enforceable under California's Uniform Foreign Money Judgments Recognition Act. (UFMJRA) Download the decision here.
What makes this case significant? The lack of treaty obligations regarding the recognition of judgments between China and the United States and the valueless nature of an American judgment in the Chinese legal system. One expects this decision to be of great interest to Chinese plaintiffs with Chinese judgments against American corporate defendants, especially those located in the state of California. Other states that have enacted the UFMJRA, including New York, may also be within consideration..
The decision appears, on brief review, to be specific to a curious set of facts with a lengthy history, intensively reviewed. Nonetheless, one might compare to the attempt to enforce an American judgment against a Chinese defendant in a Chinese court. Don Clarke at Harvard wrote about this very subject in 2004, the abstract of which reads:
Whether the judgments of United States courts can and will be enforced in China is a question that will be increasingly asked as economic ties grow between the two countries. At present, at least, the answer is straightforward: U.S. judgments will not be enforced. Chinese law requires the existence of a treaty or de facto reciprocity in order to enforce a foreign judgment; neither exists between the United States and China. Research reveals specific cases in which enforcement was refused and no cases in which enforcement was granted. Thus, the best alternative for litigants seeking the assistance of Chinese courts is to obtain an arbitration award in a New York Convention member country - China is a member itself - or to litigate in Chinese courts.
The imbalance between the ability of Chinese judgment holders in America and American judgment holders in China is very disturbing, and should become the target of lawmakers. I must confess to less than adequate knowledge of American lawmaking activity regarding reciprocity of judgments between China and the United States and invite those more knowledgeable to contribute their comments below.
[This lengthy, but worthwhile comment from Graeme Johnson of Herbert Smith in Shanghai follows. Click this link to read it. Thereafter follows a comment from Randall Peerenboom of Zhonglun. Even more comments may be found directly below.]
Continue reading "Federal Court Enforces Chinese Judgment Against American Company"
Posted by Richard at 1:12 PM | Comments (3)August 19, 2009
Guest Post: Vivienne Bath on Stern Hu, Rio Tinto and China
[Editor's Note: Steel is a big deal in China. The World Steel Association has noted:
China became the first country ever to produce more than 500 mmt in one year. China’s crude steel production in 2008 reached 502 mmt, an increase of 2.6% on 2007. Production volume in China has more than doubled within five years, from 222 mmt in 2002. China’s share of world steel production continued to grow in 2008 producing 38% of world total crude steel.
The interconnection of high-ranking Party officials, their extended families and the steel mills (or any national quasi-state-owned Chinese enterprise, for that matter) is well-known.
Steel cannot be made without ore. China's own supply of ore is insufficient to feed its own production. Hence, China's frenetic global search for supply. After lengthy negotiations between the Chinese steel mills and Rio Tinto, the Australian mining company, failed, the Chinese government announced the arrest of four Rio Tinto employees, all of Chinese ancestry one of whom an Australian citizen born in China. These people were charged with espionage. (China-born citizens of other countries are still considered sons and daughters of China and are far more likely to be game for detention than whites.)
Shortly thereafter, after much high-level rancor between the Chinese and Australian governments, China made use of the steam valve to let off some international pressure:
Chinese authorities have backed down from accusing four Rio Tinto executives of espionage but restated the charges yesterday to include stealing commercial secrets and bribery. Official news agencies said that investigators had discovered that the four employees of the Anglo-Australian mining group had obtained commercial secrets about China’s steel and iron industries through “improper means and were involved in bribery”. Rio Tinto said that its employees were innocent and that it would fight any charges.
I would take issue with the assertion that China was in any way backing down.
The case has generated a great deal of discussion among attorneys involved with China. The following post I found especially interesting and worthwhile reading. Today's post has been graciously provided by Vivienne Bath, Senior Lecturer and Director of the Centre for Asian and Pacific Law, University of Sydney. Ms. Bath writes that the opinions expressed are entirely her own and do not represent the views of Sydney University.]
Comments on the Stern Hu/Rio Tinto Case
The case of Stern Hu and his colleagues continues to present a number of difficult issues. The first is that when Stern Hu and his colleagues were arrested, the allegation seemed to be that they were being investigated for theft of state secrets – an offence which is not clearly defined and is potentially very far-reaching – even though the information in question appeared to be commercial information of state-owned enterprises. Given that the Chinese Ambassador to Australia spent considerable time making speeches when the Chinalco-Rio Tinto deal was under consideration saying that state-owned does not mean state run and the primary aim of enterprises like Chinalco is to make money, the state secrets allegation appeared to confirm much of what the Australian Opposition and the Australian press had been saying about the proposed investment. If the original allegation had been commercial bribery and infringement on business secrets, there would undoubtedly have been a discussion on why Rio’s employees were targeted, but nothing like the fuss that the state secrets allegation created.
It should be noted that most prosecutions for bribery in China concentrate on the officials or executives who are bribed rather than the companies or people who did the bribing. Most cases involving the “bribers” have been brought by the US authorities (although Australia has its own version of FCPA, no prosecutions have ever been brought under the legislation).
It is also not clear why it is only the employees have been targeted if the allegation is commercial bribery. Why not Rio itself? If bribes were paid, where did the money come from and for whose benefit were they paid?
Another question is whether the fact that the employees are all either Chinese or, in Stern Hu’s case, formerly Chinese makes a difference to their position. James Peng, the Australian who was tried and put in goal for 6 years in China over what appeared to be primarily a commercial dispute, was also formerly a Chinese national. Chinese nationals (and former nationals) do tend to have much better access to sources in China and to be able to work with their Chinese contacts in a way that non-Chinese Australians are generally not able to do, but that does not necessarily mean that they are more inclined to act dishonestly. It does seem, however, that they are more exposed.
The last point is the motivation for the charges and the question of what message, if any, is being sent – and to whom. It appears that the Stern Hu case is probably related to the iron ore negotiations, particularly since, according to reports, various executives in Chinese steel companies have also been detained. It comes at the same time as other significant developments in the generally friendly Australia-China relationship, however.
On the one hand, stresses in the Australia-China relationship include the failure of the Chinalco-Rio deal, which was due to the Rio shareholders rather than the Australian government. The Australian government (perhaps fortunately for it) was never required to make a ruling, although this may not be believed in China, where the role of foreign governments in business is often over-estimated. In addition, from the Australian point of view, the relationship has not been at all assisted by the efforts of the Chinese Embassy and the Consulate to try to induce the government to refuse a visa to Radiya Kadeer (who actually has close relatives in Australia and has made several visits in the past) and on the Melbourne Film Festival and the National Press Club not to show a documentary about her. On the other hand, an announcement has just been made of a 20 year LNG gas purchase contract between PetroChina (which is, of course, also state-owned) and Exxon for the purchase of gas from the Gorgon field off Western Australia – reportedly the largest trade deal ever signed involving Australia. If the message in the case of Stern Hu and his colleagues is to the Australian government, therefore, it is completely unclear what it is. If it is directed at Rio Tinto and the Chinese steel companies, the ramifications have been considerably broader than intended.
Posted by Richard at 1:32 PM | Comments (0)August 17, 2009
Another Large Drop in Foreign Direct Investment in China
Not surprisingly, the Chinese Ministry of Commerce announced today that
Investment declined 35.7 percent from a year earlier to $5.36 billion, the Commerce Ministry said at a briefing in Beijing today. That compared with a 6.76 percent drop in June.
Creatively spinning this data -- which, as with most Chinese statistics, likely represent an optimistic representation -- Commerce Ministry spokesman and advance man for the investment roadshow, Yao Jian, said:
“China’s FDI is still healthy compared to the global slump in investments...We can say that China is one of the most attractive places for investments.”Posted by Richard at 12:53 PM | Comments (0)
August 12, 2009
WTO Rules Against China -- Limits Book and Media Imports
A World Trade Organization panel ruled on Wednesday that China had violated its international free trade rules by limiting imports of books and movies,
WTO Findings and Conclusions here. (Beware: although written in what appears to be English, it is generally impervious to understanding by those with graduate school education. You may need to hire a specialist.)
UPDATE: China to appeal.
Posted by Richard at 6:45 PM | Comments (0)August 10, 2009
Guangzhou "Chocolate City" -- African Population Stages Demonstration, Large PSB Presence
A spontaneous demonstration in Guangzhou the likes of which have not been seen in China for perhaps 75 years: all foreigners. But this time, a twist: they are all black.
Trapped in a police raid on illegal immigrants that afternoon, Okoro chose to leap from the second floor of a shopping mall rather than be arrested.
He landed on his head.
Now, as he lay unconscious on the station's doorstep, angry protestors fanned out into the street – blocking traffic, ripping up plants, waving tree limbs and denouncing the police.
August 7, 2009
Asiabizblog -- Amazing Number of Backlinks
I don't usually toot my own horn, but I recently discovered that 49,080 high quality backlinks reference this website. This makes this weblog, IMHO, one of the best-known dealing with the topic of Chinese business and law.
Posted by Richard at 3:40 PM | Comments (0)
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