Chinese Lawyer in Shanghai

A Blog about Chinese Civil and Business Laws Devoted for Foreign Investors and Expats in China

China’s economy is having a rough ride at the moment and it’s only get to get worse. China’s economy grew at its slowest rate in 24 years in 2014, just 7.4%. Its stock market has fallen around 40% since hitting multi-year highs in mid-June. And the government is burning through cash reserves to prop it up. China’s debt is also twice the size of its GDP. Now it looks like  [ Read More ]

It is not rare to see a Sino-foreign joint venture company (indeed any type of company) to run into a stalemate where the operation comes to halt or the minority shareholder(s) is marginalized with no rescue. For the victims in such deadlock, there should be a way out of it. After all, justice should be upheld. I. The Law and Judicial Interpretation As a remedy to the shareholder(s) caught in  [ Read More ]

Apparently this is an effort to bail out or keep afloat the ailing Chinese property market on a national scale. Unfortunately, hot markets in the first-tiered cities are still closed to foreign buyers like Shanghai. However, it is very likely that local governments in Shanghai may loosen the regulation to have more foreign buyers. The main benefits of the change are directed towards corporate investors that are engaged in real  [ Read More ]

International business contracts often include an jurisdiction clause in which the parties agree to submit the disputes arising from such contracts to certain courts. Since there are so many international business contracts with China, it is of particular importance for foreign legal counsels to know the rules under Chinese laws and judicial practice in regard of jurisdiction agreement. I. Statutory Provision China Civil Procedures Law, newly coming into force in 2013,  [ Read More ]

Companies or corporations (in this text, a company is the same as a corporation unless otherwise indicated in the context) are so ubiquitous in our life and yet at law, companies are so elusive to define. I am reading the book “Business Persons-A legal theory of the Firm” by Eric W. Orts, a law and economic professor at Wharton School, a nice piece of work reviving the legal analysis of  [ Read More ]

This is more an academic thought than a practical tip. I am reading the book “Agency, Partnership and the LLC” (2nd ed, West Nutshell Series)  by J. Dennis Hynes in particular to find support for my personal understanding of the agency relationship between shareholders/members and the companies/corporations they invest. In China, law scholars seldom shed lights on the nature and contents of the relationship between shareholders and companies. People tend to  [ Read More ]

Here is the question: Dear Jason, Today I was doing some research on the legal representative of WFOE’s. During my research I came across the following article: In your article you mention the following: When this legal representative resigned by submitting his resignation letter to board of the directors of the WFOE, upon receipt of the this resignation letter, from that moment, within the company, the resignation shall take effect.  [ Read More ]

OEM production is an important way of China collaborating with foreign businesses where a Chinese factory is requested to produce certain parts or end products under an OEM contract under which such parts or products will all be shipped to foreign markets. In this post, OEM production we discuss refers particularly to an OEM arrangement where the China OEM factories apply foreign trademarks on the parts and products. Problems arise  [ Read More ]

Overview of overseas business of Chinese companies China’s role in the global economy has rapidly changed. As Chinese FDI outflows are rapidly closing the gap with inflows, the country is expected to be the most important net investor in the world in the coming two years (Unctad, 2014). The increasing importance of state-owned enterprises (国有企业,国营企业) in China has accounted for the majority of outward direct investments worldwide, resulting in a  [ Read More ]

Apparently, many are considering cashing in on their property holdings in China. Yes, it may be the right decision to make. The trend leader is the Hong Kong Tycoon Li Ka-shing who has unloaded its Chinese property assets over the recent years. Here is a report from WSJ “In Chinese Property, Smart Players Are Selling“. He is not alone.  Many small property owners are also ready to sell. I have  [ Read More ]

I. Basic Facts and Legal Concepts in the Ongoing Case Shanghai Jahwa Corporation, a listed public company in China, was not happy with its general manager in an internal corporate struggle, so Jahwa’s board of directors made a decision in May of 2014 to fire the general manager citing the manager’s personal responsibility for loopholes in Jahwa’s internal control polities revealed by an auditing firm. Behind the scene is the  [ Read More ]

The world is now sourcing various products in and from China. You may be one of them. Wherever you do business with China (I mean, Chinese businessmen), you need to sign a contract with your Chinese counterparts. Unfortunately, as a new market economy where most businesses esp the small ones don’t really know much about market, Chinese businesses don’t take contracts serious and may often dishonor their promises clearly written in  [ Read More ]

Many may be aware of the row between CIETAC Shanghai (now Shanghai International Arbitration Center) and CIETAC headquarter in Beijing. For long, CIETAC Shanghai is operating as a branch office, and under the instructions of CIETAC headquartered in Beijing. But disputes erupted in 2012 when CIETAC revised its arbitration rules with CIETAC Shanghai claiming independence from CIETAC, a break-away that put many people in puzzle as to which arbitration commission  [ Read More ]

This is a good lesson to be learned by legal professionals in China, and foreign law firms and lawyers instituting arbitration proceeding in China shall also bear this in mind. Here is the true story: a seller and a buyer entered into a trademark transfer agreement pursuant to which the seller agrees to sell a trademark (the “Mark A“) to the buyer. Upon the buyer effecting title transfer with trademark office, it  [ Read More ]

International law firms and lawyers are thriving in China for long. Foreign investors generally come into China hand in hand with a foreign law firm. International law firms are appealing to foreign investors in China for various reasons: feeling more bonded with each other due to language skills and culture, having global connections and resources to serve clients and the like. Even though foreign law firms and lawyers are not allowed  [ Read More ]

Here is the story: A foreign investor wishes to buy a Chinese local brand in respect of certain products falling within Class A, and at the time of executing the trademark transfer agreement, the seller doesn’t disclose that he has a very similar trademark in Class B products which are similar products with those in Class A. After partial payment of the sale price, the buyer tries to effect the  [ Read More ]

To many, it may seem a simple and even stupid question. But it is not. I   In the Case of Domestic Company In a country with the tradition of statute laws, when a statute law fails to offer a clear answer to a certain legal issue, it can be a problem in practice. With respect to the captioned question, China Company Law does not provide clearly for when a  [ Read More ]

Low Inflation Rate According to the National Bureau of Statistics, China’s inflation rate slides to 5-year lowest in September. Meanwhile, the producer price index, a measure of inflation at the factory gate, fell 1.8 percent last month, after slipping 1.2 percent in August. In this month, the consumer price index increased only 1.6% year-on-year, which is the smallest growth from January 2010 and 2% decrease from August. The destocking amid  [ Read More ]

It happens not only in China. There seem to be property scam all over the world, click here and here. A recent case intrigues me a lot. Facts: an old Shanghai lady who become an American citizen back in 1990s left her apartment in down town area of Shanghai to her niece for use and care. Recently when she came back to Shanghai, she found that her apartment was now  [ Read More ]

I have been serving as external legal counsel for SlamBall China for a couple of years. With its rapid growth and expansion, it has attracted more and more media attention. In this November, it will hold a SlamBall tournament in Wuhan and Beijing, a big event for SlamBall China and for the sport itself. Here comes an internet company with interest to broadcast the event live on its website. Thus,  [ Read More ]