China Law Blog

Actually I came here because my wife missed home, and the business isn't official(that is, isn't registered which because I'm not Chinese takes a lot of time and money and could very well be flat out rejected, have a read of some posts at China Law Blog http://www.chinalawblog.com/ , they cover the details). Basically this is something I've just gone ahead and started, will work my ass off to make work, and if it does, and is worth while then I'll go official.

For those who wants to stop supporting China, don't lose hope. Supply chains are migrating, due to tariffs, sanctions, and hatred towards CCP. Don't let naysayers who may have a vested interest in China talk you down. Just keep checking where the product you are buying is coming from. - check https://chinalawblog.com and you will see that companies are indeed moving out of China at a quick pace. In fact, the site advocates that you do not think of China as the default manufacturing... - most citizens in other countries hates China now. https://www.pewresearch.org/global/2020/10/06/unfavorable-views-of-chi… this dictates shifting consumer behavior (more and more people will choose items made not in China). US citizens has a 20% favorable view of China. https://thehill.com/homenews/news/543354-view-of-china-as-greatest-us-… - No one wants to go to China right now. If you want to go, you are subjected to an anal swab covid test, mandatory spyware on your phone, plus visa incentive that requires you to use their state covid vaccine (50% efficacy!). Not to mention foreigner kidnappings and disbar from leaving the country. No company in their right mind would send their staff to China to increase footprint there - from footwear https://footwearnews.com/2021/business/trade/us-footwear-imports-2021-… to furniture…

The U.S is a much bigger economy than China and that's one of the reasons why you see penetration from U.S companies in China. Just because there are U.S companies in China doesn't mean that what I said about the Chinese government making it hell to do business there is false. Your argument is not logically sound. But as to your point, some of the things that make it difficult for western countries to do business there is the great firewall, draconian privacy laws https://www.chinalawblog.com/2019/09/chinas-new-cybersecurity-program-… and subsidies (both monetary and policy) from the Chinese government that make it almost impossible for foreign companies to compete against domestic companies.

See follow up blog post https://www.chinalawblog.com/2019/10/chinas-new-cybersecurity-system-t…

Except the SEC has given Chinese companies an exemption from normal oversight. I agree that there shouldn't be a blanket ban - but the companies should have to follow the same rules as everyone else. https://www.chinalawblog.com/2019/06/china-and-the-u-s-stock-market-no…

IMHO, the Chinese influence over the law system will damage HKs economy more than the protests in the long term. "Protests damaging HK" is a narrative that seems to be pushed in Chinese state media. I recommend: https://www.chinalawblog.com/2019/08/hong-kong-for-international-busin…

A warning for folks considering working in China (love to hear this debunked if untrue): https://www.chinalawblog.com/2016/09/the-china-stock-option-scam.html > no foreign person can own stock in a Chinese domestic company not already listed on a stock market. So any such option or stock transfer is void from the start. Foreigners are not permitted to be shareholders of Chinese domestic companies, nor does China recognize the concept of nominee shareholders.

Chinese work visa rules contain requirements like you must do P and you can’t do P. Compliance is impossible given the contradiction. Instead, you need to go with the flow like everyone else, China is not a rule of law country, they will just use the law on you if they don’t like you (and given the way the laws are written, you are necessarily breaking something). It is also important to read sources like https://www.chinalawblog.com if you want to survive in China long term.

That's not the case. Check https://www.chinalawblog.com/ for some examples if you want to. Easy ones are: You can be held criminally liable for mistakes your employer makes, since you have no control over and likely no knowledge of what "illegal" actions your employer might be taking, there is no way to comply with the law. If you sell something to a Chinese company and they decide that they aren't satisfied with your product (maybe they just don't want to pay), you can be charged with a crime for selling "defective" products.

> the fiction that we live in a world that's totally governed by fairness and laws For those who follow China closely, this delusion doesn't really exist. Check out this article from 2010: https://www.chinalawblog.com/2010/05/how_not_to_get_kidnapped_in_ch.ht… https://www.chinalawblog.com/2012/06/how-not-to-get-kidnapped-in-china… A simple search on that (excellent) blog will give you many, many more examples. Those articles are years old; it's only getting worse.

Worth reading this blog; they tend to cover related issues: https://www.chinalawblog.com/2018/03/how-to-give-away-your-ip-in-china…

The issue with faulty PPE is that demand has surged and tons of Chinese factories are trying to retool to meet that demand. At the same time, international demand for other types of goods is dropping off a cliff, so Chinese factories have an even greater incentive to retool and produce PPE. With so many inexperienced manufacturers and such a rush to get to market, quality suffers. There are also all sorts of unscrupulous middlemen and faudsters who are taking advantage of the crisis to sell non-existent, mislabeled or shoddy supplies. Buyers are desperate to obtain PPE quickly, and are willing to spend enormous amounts to get it, so it's a seller's market and fraud is easy. There's an interesting account of the current situation here: [1]. Allowing foreigners to get defrauded is bad for China's brand, so the government recently (in the last few days) issued new regulations on exports of medical equipment.[2] The regulations should improve quality, but will also make it more difficult to obtain PPE from China. Pick your poison: more PPE with poor quality control, or less PPE with better quality control. 1. https://www.chinalawblog.com/2020/03/buying-face-masks-and-other-ppe-f… 2. https://www.chinalawblog.com/2020/04/buying-face-masks-and-other-ppe-f…

I read the follow-up blog post with details[1] as well as the actual Chinese regulation text[2]. The blog post seems to omit a lot of details and some claims are dubious. I don’t have time to translate everything, but here’s an example quote from the blog post: > The inspectors can fully access the system and they are permitted to copy any data they find. See Article 15. Whereas Article 15 reads (even if you can’t read Chinese, Google Translate will probably do a reasonable job) > ... look up and/or copy information on matters related to the audit and inspection of Internet security. ... So this is quite vague (not really surprising for any regulation), but at face value the law doesn’t seem to say “fully access” or “any data”. Does this cover any data that has nothing to do with security? Ostensibly not. Realistically I’m not sure. Either way, citing the law with an exaggerated translation doesn’t promote confidence in the blog post. [1] https://www.chinalawblog.com/2019/10/chinas-new-cybersecurity-system-t… [2] http://www.gov.cn/gongbao/content/2018/content_5343745.htm Edit: to be absolutely clear, I was only commenting on the part of the blog post with explicit citations. Most of the blog post speculates on intent and actual scope, but since those are speculative and don’t deal with the text of the law directly, the author is of course entitled to his own interpretations.

And yet reading sites like China Law Blog, https://www.chinalawblog.com/, I don't get the impression that the rule of law is especially problematic, per se. For example, AFAICT few people say that China doesn't take enforcement of trademark protections seriously. The procedures for redress and enforcement exist and applied fairly. But navigating the administrative state can be confusing and cause people to trip over the technicalities. Some of the stories I've read from the blog above detail situations where Chinese partners or workers used the legal system against foreigners in very surprising but arguably fair manners. Much like the U.S., if you want to protect your rights you really need to make sure to employ vigilant lawyers who can foresee potential problems. The U.S. is large enough that there's been little pressure to address issues of regulatory and procedural uniformity relative to the rest of the world (e.g. civil law countries). China is similar in that regard. What's different is that China's systems are almost wholly unique and far more complex, whereas the legal systems for almost all Westernized nations, including Japan, have a pedigree that can be traced back to Western Europe, if not ancient Rome. China has been adopting American-style legal rules and norms for commercial law, including common law rules about case precedent. That helps further the rule of law and, more importantly, provides processes more familiar to foreigners, but it also adds yet…

It's a fairly well known phenomenon. There is a book called "Poorly Made In China" about it, and the term for it is "Quality Fade". The concept is that after winning the contract (sometimes at a price below their own costs, in order to beat competing manufacturers), the Chinese manufacturer increases their profit margin by "optimizing" the product design - using cheaper components or omitting parts without the knowledge of the buyer, until the products are rejected. Here's an article I found from a random search on "Quality Fade" [1]. For a counter-viewpoint, the China Law Blog [2] argues it isn't Quality Fade if customers still buy the products. It was written in response to a recall of 23,000 Chinese-made cars in Australia after they were found to have asbestos in their engine gaskets. Great Wall Motor had argued that "their own in-house testing [had] concluded that the asbestos was not a danger to human bodies" [3]. [1] https://sourcingjournal.com/topics/sourcing/apparel-production-quality… [2] https://www.chinalawblog.com/2014/03/chinas-quality-fade-is-there-real… [3] https://blogs.wsj.com/chinarealtime/2012/08/17/chinese-asbestos-in-aus…

I think your comment reflects the naivety of Western thinkers when it comes to China. Chinese gov has zero interest in pursuing a US like democratic system as do other surrounding big economies. Singapore is a good example, as well as Japan with it's single party that always wins, Korea's choi-gate scandal that exposed near dictatorial decision making at the very top (and PGH's father was a dictator) shows that at the structural level, the one party system which was further encouraged by the US during cold war against communism, shows a clear rift between the mentality of West vs East. Another big reason they are so set on keeping the status quo is the sheer amount of embarassing crimes against humanity which would almost guarantee former president Jiang Zemin an international spot light in Hague trials. Saving face is a huge component but also national pride plays a large role in China. However, the biggest reason for China's commitment to it's current one party leadership structure is to avoid destabilization with it's multi-ethnic demographic. Even my friend from the mainland alleges that there are inter-provincial beefs and people won't even do business with certain ethnic groups or province due to existing stereotypes. Given it's massive population, US styled approach would be catastrophic. Of course, I believe China must eventually become free and open but I also understand the impossible task of imposing Western ideologies onto China from the top down. Change in…

In the US, you have more legal options. IIRC (and I'm not a lawyer), in China you are unlikely to be able to sue for more than what you paid. Chinese law can seem a lot more laisse faire compared to US law, unless they think you are in debt (and then you get imprisoned). Actually, it's not always laisse faire, it just looks that way because some things aren't enforced, and other things are - it's different, and your supplier knows the law better than you. From reading http://www.chinalawblog.com/, it seems one solution is to include an arbitration clause. You can take them to arbitration in the US, using US law, and get the decision enforced by arbitration treaties. But you'd want legal advice for this - if you mess up, the you can end up in a no-man's land where the Chinese courts refuse to see you (because you've specified a foreign legal jurisdiction), and refuse to enforce a foreign ruling because it's not in their jurisdiction. Also, you want some things in Chinese. If anything gets used in a Chinese court, it gets translated to Chinese. If the other party manages to influence the official translation (or the official translation is just wrong), it's not going to be fun trying to change the courts mind. Whatever the case, working with a Chinese supplier requires a good OEM agreement, written with the advice of a lawyer who knows the ins and outs of Chinese OEM agreements. It's not easy, but it's better than your supplier seeing you as an easy mark.

Beijing has gotten quite a bit more expensive in the couple years that I've been there. On top of that the currency exchange rate has gotten considerably worse. Probably in total a 25% difference since I arrived in 2006. Most people reading this would not be happy at all living off of $400 per month, that's noodles for lunch every day. I'm in my late 30's and don't feel like living like a student nor having to, I spend $2k USD per month for a very comfortable lifestyle, $1k in rent and $1k on food/misc, about 25% less than what I'd spend back home. In China it is not legal to employ Chinese people as a foreigner operating a business in China unless you're a Registered Office (RO) or a Wholly Foreign Owned Enterprise (WFOE). It is not legal to draw a salary personally unless you have a Z visa (not L or F), you need an RO or WFOE to get a Z. Furthermore the RO can not invoice Chinese customers, it is only an expense center (and is taxed on expenses). A WFOE requires registered capital typically between $10K USD to $100K USD depending on the business. Setting up one of the two can take several months depending on your luck with the government. As I understand it your LLC would be illegal to operate in China without either being an RO or WFOE (or a JV which is unlikely). You may be able get away with ignoring all this and many people do but if you're caught you can face stiff penalties and be ejected from China and are going to have a hell of a time getting more…

Possibly via: Import halt via complaint in appropriate US Customs regulatory regime and / or court, about infringement of intellectual property. This can embargo a company's product nationally in the US, and gets the attention of the producer. Not quite on topic: Stopping Infringing Products From China: Section 337 Cases. By Bill Perry - China Law Blog -- August 22, 2016 https://www.chinalawblog.com/2016/08/stopping-infringing-products-from…

Mexico wages are already lower than wages in China. In fact, chinalawblog.com talks a lot about companies shifting to Mexico due to USMCA and short turnaround for supply chain. https://www.chinalawblog.com/2020/03/international-manufacturing-updat…

This is the most in-depth article I've seen on the topic: https://www.chinalawblog.com/2019/11/chinas-new-cryptography-law-still…

Probably in relation to this: https://www.chinalawblog.com/2019/09/chinas-new-cybersecurity-program-… Whether it's real or not or even likely to be effective, there's a chilling effect and businesses are obviously concerned to be raising the issue of Chinese-based employees with GitLab.

Yeah no, thanks. Sure, everything is nice for many people if you don't dare speak against the authority. Tomorrow you're on the wrong side of the fence. Good luck coming back. https://www.washingtonpost.com/world/asia_pacific/chinese-app-on-xis-i… https://www.chinalawblog.com/2019/09/chinas-new-cybersecurity-program-…

WRT to "is iCloud backdoored" in China, I made a recent submission that didn't make it to the first page, but it's still relevant: https://www.chinalawblog.com/2019/10/chinas-new-cybersecurity-system-t… > The inspection team has complete access to the network system. Inspection can cover both the technical aspects of the network system and the data/information maintained on the servers. See Article 10. The inspectors can fully access the system and they are permitted to copy any data they find. See Article 15. The only restriction on the inspectors copying the data in your company’s system is that the inspectors must provide you with a receipt. Though Article 10 “restricts” access to matters involving national security, the definition of national security in China is so broad that there is no real limitation on what can be accessed, copied and removed.

Actually ALL data centers hosted in China will be subject to data examination by the Ministry of Public Security https://www.chinalawblog.com/2019/10/chinas-new-cybersecurity-system-t… The inspection team has complete access to the network system. Inspection can cover both the technical aspects of the network system and the data/information maintained on the servers. See Article 10. The inspectors can fully access the system and they are permitted to copy any data they find. See Article 15. The only restriction on the inspectors copying the data in your company’s system is that the inspectors must provide you with a receipt. Though Article 10 “restricts” access to matters involving national security, the definition of national security in China is so broad that there is no real limitation on what can be accessed, copied and removed.

Basic incompetence + complete inhumanity + a completely corrupt political system that can be purchased by corporate interest at the expense of the common folk. In my country (and most others outside of the US I'm sure (even China does employment law better the the US https://www.chinalawblog.com/2017/02/china-employee-terminations-dont-… ) there's legal precedent and legislation to prevent employers from firing people without sufficient reasons and also to penalize employers who break a promise of employment. The USA however is too corrupt to care for its citizens (HN usually DEMANDS the 'sauce' so here's the 'sauce' https://www.cambridge.org/core/journals/perspectives-on-politics/artic…

To think about going to China, you're going to have to think about how to LEAVE china first "once the news goes out that you will be leaving China, alleged creditors will come out of the woodwork. The tax authorities will come up with taxes that you owe. Your landlord will explain why you owe it way more than you thought you did. Your suppliers will send you bills for items they never actually gave you. Your employees will demand all sorts of severance." https://www.chinalawblog.com/2018/09/how-to-terminate-your-china-facto…

Boo hoo, poor Micron. Seems there are some hidden costs to exporting all manufacturing to China. This has happened over and over (see because China often requires American companies "partner" with a Chinese company to setup shop in China: https://www.chinalawblog.com/2011/04/fellowes_brought_to_its_knees_in_… US companies like cheap foreign labor and manufacturing, but need to realize there could be a high long-term cost - one that could put them out of business. We Americans seem to have a hard time focusing on long-term results. If an action boosts short-term profits or the stock price, we do it.

I guess it's not _entirely_ unprecedented (apparently there is exactly one example in each direction), but yeah, I think they will not be arrested any time soon. https://www.chinalawblog.com/2014/03/enforcing-china-court-judgments-o… https://blogs.law.nyu.edu/transnational/2018/04/the-chinese-courts-enf…