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China and The World - Medley 2006

December 29, 2006 - by Robin

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This was the year when "Bird's Nest" (the Beijing National Stadium) and "Water Cube" (the National Aquatic Center) were dressed. With 588 days to go, Olympic spirit is taking shape and gaining momentum and a host of other Olympic facilities are gradually surfacing in one of the world's most vibrant and dynamic cities. Over 240,000 Beijingers applied to become volunteers and affordable ticket prices were announced for the 2008 Beijing Olympic Games.

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Millions were left homeless and hundreds were left dead when a series of torrential rainstorms and typhoons namely Saomai, Bilis, Prapiroon and Kaemi wrecked several parts of the Chinese mainland hard in the second half of the year. North China was hit by a record number of dust and sandstorms, while Sichuan Province in Southwest China was plagued by a drought, the first since 1951.

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The highest railroad in the world at an altitude of 4,159 meters and also the first railway connecting the Tibet Autonomous Region with the rest of China, Qinghai-Tibet Railway, was officially opened in July. The railway stretches 1,956 km from Xining, provincial capital of Qinghai, to Lhasa, capital of Tibet Autonomous Region. The railway is poised to boost prosperity in West China.

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Meanwhile, CPC Central Commission for Discipline Inspection was busy investigating a string of corruption and social security fund scandals. A number of senior party officials were sacked and suspended as a consequence.

Chicken eggs stretched their lead further over duck eggs when thousands of kilograms of duck eggs found to have contained the carcinogenic red dye Sudan Red IV were taken off shelves and destroyed. Farm owners used the harmful dye to turn egg yolks red. The case is the latest in a series of food safety problems in China.
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China Blawg's thoughts 0 Comment December 30, 2006, 2:39 pm

The New Partnership Enterprise Law of the PRC

December 7, 2006 - by Lily Han

Partnership Enterprise Law of the People's Republic of China ("2006 Amendment" ) was amended on August 27, 2006, which shall become effective on June 1, 2007. With 109 articles, the "2006 Amendment" is divided into six chapters, i.e., General Provision, General Partnership Enterprises, Limited Partnership Enterprise, Dissolution and Liquidation of Partnership Enterprises, Legal Responsibilities and Supplementary Provisions. In comparison with the current law, the "2006 Amendment" has the following noteworthy points:

1. Scope of Partners

According to the current law, all partners in a partnership enterprise shall be natural persons only. However, the "2006 Amendment" provides in Article 2 that natural persons, legal persons, and other organizations may establish general partnership enterprises and limited partnership enterprises. That is to say, legal persons and organizations are allowed to be partners in a partnership enterprise, nevertheless, wholly state-owned companies, state-owned enterprises, listed companies, and public service entities or social communities are not allowed to serve as general partners.

2. General partnership VS. Limited partnership

In accordance with the "2006 Amendment", partners in partnership enterprises are divided into two kinds: general partners and limited partners. Like the current law, a general partnership enterprise may be formed by general partners. The partners will bear unlimited joint and several liabilities for the debts of the partnership enterprise. However, the "2006 Amendment" introduces the concept of "limited partnership", which is to be formed by at least one general partner and limited partners. The general partner will bear unlimited joint and several liabilities for the debts of the limited partnership, while the liabilities of limited partners are confined solely to their capital contributions to the limited partnership. While it is reasonable for a third party to assume that a limited partner is also a general partner and hence plausible to transact with him, the limited partner will bear unlimited liabilities for such transaction as a general partner.

3. Special General Partnership Enterprises

For the purpose of reducing the risks of general partners in professional service institutions and developing professional service institutions, the "2006 Amendment" provides that a professional service institution, which provides its clients with paid services on the basis of professional knowledge and special skills, may set up a special general partnership enterprise. In a special general partnership enterprise, a partner or partners shall bear unlimited liabilities or unlimited joint and several liabilities for the debts incurred by the partnership enterprise due to his (their) intentional or serious wrongful act in his (their) practice. In such situation, other partners will be liable solely for the amount of their capital contributions to the partnership enterprise.

4. Income Tax of Partnership Enterprises

Under the "2006 Amendment", for production and business operation incomes and other incomes of a partnership enterprise, the partners are required to pay their respective income tax. In other words, there is no taxation at the partnership enterprise level. All profits of the partnership enterprise will be ¡°passed-through¡± and be attributed to the partners.

5. Bankruptcy of Partnership Enterprises

A partnership enterprise may go bankrupt under the "2006 Amendment". If a partnership enterprise is declared bankrupt by a court, its general partners are still subject to unlimited joint and several liabilities for the debts of the partnership enterprise.

6. Foreign Parties Participation
Foreign enterprises or individuals may set up partnership enterprises in China under the "2006 Amendment". The State Council is authorized to issue separate regulations that govern foreign-invested partnership enterprises.
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China Law 3 Comment December 7, 2006, 11:45 am

Draft Labour Laws-Red Light For Foreign Companies?

December 7, 2006 - by Rikin Patel

Those of us who maintain an active interest in the development of the Chinese legal system may well by now have heard of the reforms proposed in its labour laws of late. 'The Labour Contract Law of the People's Republic of China (Draft)' passed on 28 October 2005, and formally published on 21 March 2006 is set to come into force some time in May 2007.

A number of foreign multinationals have publicly threatened to withdraw from China should the Draft Law be implemented; since the publication of the Draft Law, it has been openly announced by many that there is a strong preference for the current labour law, 'The Labour Law of the People's Republic of China (1995)' alongside numerous local regulations, to remain unchanged.

Bodies such as The US-China Business Council (to name but one) have strongly denounced the Draft, asserting that "in practice...(the) provisions would result in the loss of rights rather than the gaining of rights", and that the "Draft Law's provisions requiring trade union involvement in certain areas could have the unintended consequence of harming employees' interests". Such views are shared also by the American Chamber of Commerce in Shanghai, and the European Union Chamber of Commerce in China, who collectively represent over 2000 foreign companies, including computer colossals Microsoft and Intel.

But not all institutions feel the same way. The International Textile, Garment and Leather Workers Federation (ITGLWF) has written to leading retailers asking them to support the reforms, and Wal-Mart, the American supermarket giant, for example, has already adopted policies in relation to trade unions that comply with the Draft Law. But then, Wal-Mart is learning from its rather costly mistakes in the US. It faced a spate of claims from employees for neglecting labour legislation in Pennsylvania, California and numerous other states (their bank balance was reduced by well over UD$200 million as a result).

So is all this protest merely in vain? Will the NPC really take heed to their cries of dismay?

I, personally, do not think so. The Draft brings about important changes that seek to close the vast differences between the rich and poor - and every journey begins with a single step. I would much rather see corporate - not countryman's - pockets get lighter, particularly in the case of China's underpaid and overworked labour force.

It is clear that labour law is a controversial area.

For now, we wait for the drafting process to end, and for ratification by the National People's Congress of the People's Republic of China (NPC) and the Standing Committee of the NPC, after which point we may consider the issues in more depth.
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China Law 0 Comment December 7, 2006, 11:22 am

So sue me...

November 23, 2006 - by Tim Cronin

In a landmark case for freedom of speech (or the lack thereof) in China, a Nanjing University professor has successfully sued Blogcn.com for allowing personal attacks to be posted on their heavily trafficked website. When Chen Tangfa of the School of Journalism at NU came across the insulting remarks of a former student, he immediately called Blogcn.com and requested the deletion of the post. The major China blog's refusal to do so led Chen to file suit in the Gulou District People's Court of Nanjing where he was awarded a 1,000 yuan settlement. The $127 sum, however, is not nearly as significant as the precedent this case could set for freedom of expression in China.

A judgment of defamation requires not merely evidence of insult, but rather a published, defamatory statement of fact that causes personal damages to the plaintiff. Let's examine blogger K007's "defamatory" comments as reported by Xinhua:

"Chen Tangfa is indeed an uncouth person. I can see this from his book. He wrote the worst textbook".

The statements are insulting to the professor's character, and they easily could have caused real damages considering the remarks about Chen's publications. But would the average reader on Blogcn.com actually believe this post to be a statement of fact? I would personally think that the answer is no. When someone levies the judgment of "uncouth" against another individual, the insult is clearly a matter of opinion, as there has never been empirical research conducted on what constitutes uncouthness. In regards to K007's criticism of the professor's publications, the blogger is not claiming that scholarly peer reviews have found Mr. Chen's work to be lacking academic validity, but rather the student is asserting his opinion that the textbook is unimpressive. K007 further indicates the editorial perspective of his entry by stating "I can see this from his book". Neither of these expressions amount to a defamatory statement of fact.

The most frightening aspect of the Chen case is the plaintiff's position as a professor of journalism at Nanjing University. Is this the example that Chen hopes to set for his students aspiring to be members of the free press? After the court ruled in favor of Mr. Chen, he told the press "personal dignity outweighs freedom of speech". In matters of genuine libel and slander this maxim holds true, but a student's open criticism of a former professor does not fall under this category.

By granting this ruling, China's courts appear to have decided that the average blog reader is incapable of differentiating between an actual defamatory claim and the immaturely worded opinions of a seemingly resentful college student. If this most simple form of criticism is prohibited, then journalists¡ªfrom investigative reporters to movie critics¡ªmay quickly find themselves out of a job. At a certain point, governments must give their people the benefit of doubt that they can evaluate for themselves whether words are statements of fact or expressions of opinion. What do you think?
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China Blawg's thoughts 3 Comment December 2, 2006, 8:43 pm