Chinese Lawyer in Shanghai, Shenzhen and Beijing

A Blog about Chinese Civil and Business Laws Devoted for Foreign Investors and Individuals with an Interest in China

A typical contract dispute is that one party unilaterally rescinds a valid contract by serving a termination notice to the other party citing some or no reasons. This drastic action often causes turmoil and substantial loss to the other party. What can the non-terminating party do when caught in such a situation under Chinese contract laws? The answer is not a ready one to give. Indeed, there has been quite  [ Read More ]

Today, Dacheng Law Offices and Dentons formalize their marriage resulting in the world’s biggest law firm. The Firm will be known as “Dentons” in English and all other languages, except for Chinese. In Chinese, the Firm will be known as “大成;” the Firm’s logo unites the two in a design that features both as “大成Dentons.” A nice note: the pronunciation of the Chinese words “大成” and that of the English  [ Read More ]

As a part of the China’s planned financial reforms on the so called capital account, China has not expressly allowed its citizens to purchase overseas properties, despite some attempts in the past by some local government, which were called off by the central government. October 30, China Central Bank together with some other central ministries issued a new notice on further pushing forwards the financial reforms in Shanghai Free Trade  [ Read More ]

Many foreigners are concerned with China estate taxes when they inherit estates in China. As a matter of Law, China has not formally enacted estate tax laws despite rumor about it for many years. I personally don’t foresee this enactment any time soon. After all, without this law, Chinese rich people are already fleeing this country for various reasons. An estate tax law will definitely accelerate this flight and seriously  [ Read More ]

I don’t write on business culture or business environment much on this blog. But recent experience in helping two clients from the United States  warrants and prompts one. First Story: an old couple in their eighties, who are Chinese but migrated to USA thirty years ago wish to sell their old lane house in the heart of Shanghai, the French Concession area. It is a beautiful villa house with a  [ Read More ]

January this year, I wrote a post commenting on the then ongoing high-profile employment dispute involving the general manager, Mr. Wang Zhuo and his employer, Shanghai Jahwa Corporation, a listed company in China. You can click here for more: Today, a piece of news ran on a news website shedding the final lights on the case. You can click here for the news in Chinese version. This news said that  [ Read More ]

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 ]