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"The truth is rarely pure and never simple"

-Oscar Wilde

Problem: nanny and housekeeping domestics not protected in labor contract law

November 30, 2007 - by Maggie Xu

The Labor Contract Law that goes into effect soon will not protect people who work as domestics inside private homes. Moreover, that recruit these kinds of workers serve just as an intermediary and do not sign contracts with them.

With the rapaid progress of china's social and economic development, there are increasing demand for nannies and housekeeping domestics in big cities. Let us take Guangzhou for example, arounmaid agenciesd 400,000 people are involved in this industry, with 90 percent of them currently maintaining an intermediary relationship with maid agencies.

Recently, some big maid agencies have begun to hire workers directly in order to provide better service for their clients. To manage these people effectively the company must sign a contract with their employees and pay them on time. Nannies and domestics would benefit the most from this kind of management because, as an employee of the company, they would not only have the opportunity to undergo training but they would also be entitled to a workman's compensation insurance the company purchases for them.

But this trial move will perhaps be smothered by the new law since it does not require the part-time employers to sign contracts with the workers. Neither do such employers need to pay compensation to the workers when the labor relations are terminated or canceled.

According to many experts, all kinds of domestics: nursemaids, nannies, housekeepers and cooks -- all be included in standard labor laws. A special chapter should be given to these domestic workers. Special rules should be set up to protect their rights so that they may enjoy workman's compensation just like other city employees.

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China Law 0 Comment November 30, 2007, 5:03 pm

Chinese netizens want law to protect their personal information

November 28, 2007 - by Maggie Xu

Around 90 % Chinese Internet users (netizens) have required the enactment of a law ASAP to protect their personal information from unauthorized spread in the internet.

The widespread disclosure of personal data in the internet arose hot attention and aggressive abuse among netizens.

Nowadays, Many Chinese have begun to buy and sell stock in the bullish stock market. One stockholder, complained he received constant phone calls about stock recommendations from strangers.

New home and car owners, and even parents of newborn babies, have received unwanted calls or short text messages promoting various products.

The government began drafting a law on personal information protection in 2003 and the draft law by experts from Chinese Academy of Social Sciences (CASS) was submitted to the State Council in 2005.

The draft is still under discussion, according to the State Council.

According to Zhou Hanhua, who was in charge of the draft, said the new law on personal information would make dealers of personal data liable to civil and criminal legal action.

The personal information, including phone numbers, home addresses, medical files, would be protected under the draft law.

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China Law 1 Comment November 28, 2007, 9:43 am

China, a gold mine for celebrity speakers?

November 21, 2007 - by Maggie Xu

I read a news recently that the former British Prime Minister Tony Blair made a speech a couple of days ago in Dongguan, Guangdong Province.

Blair's speech was mainly about how we should develop our economy, our society, and how China and Britain can facilitate harmonious development between economy and society, which contains nothing new ideas in his speech.

While what surprises me a lot is the cost inviting Blair to deliver the speech. According to the report from the newspaper, the total cost of holding such a speech reached over 10 million yuan (US$1.34 million), including 760,000 yuan spent on a banquet alone.

I wonder was it simply because of the speaker's status as an ex-prime minister that his speech enjoyed a sudden rise in value?

From my view, based on Blair's experiences in the arena of world politics, we had expected a much more exciting speech, at least one that would bring us some new and original views or even pertinent criticism.

If such a huge amount of money was spent simply for the purpose of a speech that any local Chinese official could easily make or a few polite remarks, it was not worth it at all.

With China's opening up and development, China has become a golden market for world celebrities such as Blair and former US President Bill Clintonto make speeches.

However, we should avoid being impetuous and vain and instead adopt a modest and pragmatic attitude so as to obtain genuine and new knowledge, especially when such speeches cost taxpayers' money, whatever the size.

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China Blawg's thoughts 0 Comment November 21, 2007, 4:19 pm

Perspective on the Amendments to China¡¯s Trademark Law

By Cherry Jin

An additional layer of protection has been added to the China Trademark Law in the form of Amendments concerning Geographical Indication. In Article 3, this protection is termed ¡°Original Appellations.¡± In subsequent articles, however, the term ¡°Geographical Indication¡± is used.

Although these two descriptions are identical in meaning, it is not made clear in the Amendments that they are merely different descriptions of the same concept. This oversight has generated considerable confusion. In many other countries, such as the United States, the Geographical Indication is usually protected via a ¡°Certification Trademark¡± and/or a ¡°Collective Mark.¡± In China, however, only the ¡°Certification Trademark¡± has been adopted to protect the Geographical Indication.

Additionally, Chinese Trademark Law protects only the ¡°Exclusive Right to Use a Trademark,¡± while in several other countries and organizations protection is also provided by the ¡°Trademark Right¡± and the ¡°Exclusive Right¡± (Sole Right). It would be a step in the right direction if, in the future, Chinese trademark registrants were also provided with this even more integrated property right.

A somewhat related issue is that cybersquatting on domain names and certain Internet keywords has become increasingly commonplace in China as an ever-increasing number of Chinese use the Internet. Many trademarks have been registered as part of domain names or Internet keywords. The Amemdments are silent regarding any particular legal action that registrants could take to fight such infringements.

Another interesting matter concerns what happens when a design patent contains a registered trademark (filed by others at the Trademark Office). Article 23 of the China Patent Law states: ¡°Any design for which a patent right may be granted must not be identical with or similar to any design which, before the date of filing, has been publicly disclosed in publications in the country or abroad or has been publicly used in the country, and must not be in conflict with any prior right of any other person.¡±

¡°Prior right¡± in this context is understood to mean the prior trademark rights and/or copyrights held by other parties. If a trademark registrant applies for a design patent with his own registered trademark, it could not be deemed to be in conflict with the prior right. On the other hand, if this registered trademark is owned by another party, the State Intellectual Property Office will likely conclude that the design cannot be patented and, therefore, that a patent right cannot be granted.

In light of all of this, it must be remembered that neither the TMO nor SIPO has the last word concerning trademark law. In China, the National People¡¯s Congress PC Standing Committee makes all final decisions regarding amendments to laws or regulations.
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General 0 Comment November 21, 2007, 3:40 pm

Shenzhen Online Scams

by Ryan Beers


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I continue to get enquiries from individuals or small businesses from outside China requesting that our Shenzhen office help recover their lost funds for purchases made over the internet or from handing out their bank and passport details to the first person who says that have an inheritance - all shiny and golden - waiting for them in a reputable Shenzhen bank.

Online scams and fraud are rampant in Southern China. Some are easily removed from inbox without more, i.e. ¡°you have won 1,00000000,00000000USD¡­¡±, however what I am concerned with is the individuals and traders from outside China who are depositing funds to Chinese bank accounts without any due diligence on the supplier. Every time, the bank account is under an individual¡¯s name, and more often than not, there is zero contact details other than an email.

Purchasing on alibaba.com or tdctrade.com ¨C then please contact me so that I can do a very cheap and quick due diligence or background check on the supplier. Often I find that these people will not hand over 300USD to a lawyer for this, but will happily hand over 10,000USD to a polite anonymous individual after some brief pleasantries and photos of a new flashing key-ring have been sent via email.
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China Culture 1 Comment November 14, 2007, 5:45 pm

China's Internet Search Engines and its Struggle for Copyright Enforcement

November 13, 2007 - by Maggie Xu

With copyright infringement running rampant among the world's second largest Internet population, China has become as much a source of frustration as a source of opportunity for multi-national music labels. They are now often looking to China's courts for protection.

According to my personal experience of dealing with the cases of copyright infringement, PRC courts will, in general, look for the following elements when deciding whether an action constitutes copyright infringement:

Whether the plaintiff is the legal holder of the rights under dispute;
Whether the plaintiff's rights have been infringed upon;
Whether the actions of the defendant were illegal;
Whether causation exists between the plaintiff's losses and the defendant's actions; and
Whether the defendant had the intention of infringing upon the plaintiff's rights.
All five elements must be present to establish a valid claim of infringement.

I. Is the plaintiff the legal holder of the rights under dispute?

Article 41 Paragraph 1(1) of The PRC Copyright Law ([url=http://www.chinaiprlaw.com/english/laws/laws10.htm]the "Copyright Law"[/url]) grants the producer of audio products the right to disseminate such products to the public via the Internet or "the right of dissemination"; and except for fair use(2) or statutorily authorized use(3) expressly provided in the Copyright Law, no party shall disseminate copyrighted audio products via the Internet without authorization. Any party that engages in unauthorized dissemination shall bear civil liabilities such as ceasing the infringing action, eliminating any remaining negative impact, and compensating for damages.

II. Have the plaintiff's rights been infringed upon?

According to Paragraph 1 Article 41 of the Copyright Law, the plaintiff has the right to authorize a third party to disseminate the disputed audio product via information networks and is entitled to receive consideration for such authorization.

III. Were the defendant's actions illegal?

The Copyright Law and Rules on Protecting Rights of Dissemination via Information Networks both define "actions of disseminating via information network" as "providing copyrighted works (and performance and audio and video products) to the pubic via a wired or wireless network at the time and location decided by the Internet users".

Article 4 of the Supreme People's Court's Judicial Interpretation on Issues Regarding the Trial of Copyright Disputes on Computer Networks ("Judicial Interpretation"wink.gif sets forth that "the People's Court shall find joint liability between the content provider and its users according to Article 130 of the General Rules of Civil Procedures, where the content service provider does not take measures to eliminate the negative impact of infringement including removing the infringing content from the a website after becoming aware of any infringement upon a third party's copyright or having received notice from the copyright holder." In accordance with this provision, the links provided by the plaintiffs in both cases would be illegal, and if such parties continued to provide these links while being aware that their existence caused the unauthorized dissemination of copyrighted music, the plaintiffs would be subject to "contributory infringement" and jointly liable for infringement along with the website that the search engine linked to.

IV. Whether causation exists between the plaintiff's losses and the defendant's action?

On one hand, as stated above, the disputed music would not be as widely accessible if the operator of these search engine websites removed these links from their servers or shut off their servers entirely. However, the Internet community would still be able to access the disputed content by going directly to the content-hosting website. This would be possible even if all links to the site were removed. Obviously, causation between the plaintiff's losses and the defendant's actions is hard to establish. On the other hand, undoubtedly, the websites that set up the links aid the Internet community in discovering and downloading the disputed music and expands the scope of music that becomes easily accessible through a single portal. This further aggravates the losses and damages incurred to the plaintiff.

V. Whether the defendant has the intention of infringing upon the plaintiff's rights?

In general, the principle of "non-misfeasance" is the major criterion in establishing intellectual property infringement. In other words, regardless of whether the defendant possessed the intention to cause copyright infringement, the court may establish infringement and impose liability on such a defendant to cease the infringing actions. However, this does not mean that the state of mind of the infringing party is not taken into account in the court's judgment. In fact, the intent of the infringing party is of vital importance to the court in rendering remedies other than ceasing the infringing action. For example, when assessing the extent of indemnification, the court may increase the amount if the infringing party possessed the intention to infringe or knowledge of infringement. In determining whether intent existed, the court will often look to the actions of the defendant when making their assessment.

Google's worldwide success shows the massive potential market for search engine services. The rapid growth of baidu again proves the value of search engine technology. While the potential commercial profit makes search engine services as sweet as candy, excessive candy consumption can cause toothaches. The inherent risk of infringement in cyberspace is the candy that might cause a cavity. Search engine service providers need to be very careful about the websites to which they link and remove the links of disputed content as quickly as possible when they receive warnings from legal copyright holders. It is always good to eliminate problems early, to save court fees or a trip to the dentist.


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China Law 0 Comment November 13, 2007, 9:44 am

Draft rules on paid vacation for comments

November 12, 2007 - by Maggie Xu


The Legislative Affairs Office of China's State Council has given the public ten days to make submissions on its draft regulations on paid vacation.

According to the draft released Monday, all employees of government organs, civil organizations, enterprises, and public-service institutions are entitled to take paid vacation after serving the same employer for one year.

Employees who have worked from one to ten years would have five days paid vacation; those who have worked for ten to 20 years would have ten days; and those with more than 20 years 15 days. Legal holidays and weekends will not be included as paid vacation.

However, the paid vacation time would be deducted from winter and summer vacations, which some professions were entitled to.

They shall also be deducted from vacations designed for employees to visit their parents or spouses, if they are not living in the same city, according to the draft.

The draft stipulates that "employees should enjoy their full daily salary and welfare during the vacation just as when they are working".

The draft was issued in accordance with the Labor Contract Law and the Law on Civil Servants, says the draft regulations.

Paid annual vacation has been focus of publicly debated for some time in China.


The State Council set Nov. 16 as the deadline for submissions.


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China Law 0 Comment November 13, 2007, 9:29 am

Chinese Companies Layoff Workers to Dodge New Labor Law

November 9, 2007 - by Robin

Chinese companies are trying to evade a new law that will make it harder to sack employees, according to China Daily.

The new Labour Contract Law, to take effect early next year, offers staff with more than 10 years of service at a company the right to sign a new contract that will make it harder to fire them.

I find it interesting that the new Labor Contract Law has led to many firms trimming their staff before it actually comes into force and firing employees becomes more difficult. I suppose this could be considered an unintended consequence of institutional design - except it seems the lag time between the passing of the law and its coming into effect was provided for especially for this reason, suggesting this effect was deliberate.

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Major telecom equipment maker Huawei recently ordered 7,000 employees who had been with the company for more than eight years to resign and then rejoin. To encourage them to accept the new arrangement, Huawei worked out a compensation scheme based on length of service, salaries and bonuses. The total cost of the package is expected to reach 1 billion yuan (US$134 million).

Apparently Huawei is not the only company going through this. US retailing giant Wal-Mart fired about 100 employees at its sourcing center in China last October, claiming the layoff was part of its global restructuring.

Huawei has issued a statement to the China Daily denying that it was trying to dodge the law and claiming that the layoff was part of a strategy to enhance competitiveness.

Hmmm...I am not too sure about this. It seems to me that Huawei's employees are merely entering into new contracts without affecting their continuity of service. If the existing contracts end one day and their employees show up at work on the next day with new labor contracts, would not the 10 year rule still apply to them since there is no actual break in service between the terms of the contracts?

Anyway, in response to such widespread practice, Beijing has issued a warning against such companies and is in the process of formulating special regulations dealing with companies that seek to bypass the new law.
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General 0 Comment November 9, 2007, 7:08 pm

China Railway Co Ltd to go public

November 9, 2007 - by Maggie Xu

State-owned China Railway Co Ltd, formerly known as China Railway Engineering Group Co, received approval on Nov 16th from China Securities Regulatory Commission (CSRC) to go public on the Shanghai bourse, and will probably do so within the month.

China Railway plans to sell no more than 4.675 billion A shares in Shanghai, according to a preliminary document posted on the CSRC website.


Funds raised from the IPO will be used in purchasing new equipment, building new production lines, and for real estate market and railway investment. Together with circulating capital as well as debts to banks, the required funds totals 12 billion yuan (US$1.61 billion), according to an IPO prospectus the company submitted to the securities watchdog.

China Railway Co Ltd is totally owned by China Railway Engineering Group Co Ltd, the largest comprehensive construction contractor in Asia and the third largest in the world.


Half year operating revenue of China Railway Engineering Group Co Ltd ending June 2007 was a reported 75.68 billion yuan, with net profit totaling 1.38 billion yuan.

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China Business 0 Comment November 9, 2007, 2:49 pm

Patent Applications Soar in China

November 8, 2007 - by Robin Teow

China received 268,926 patent applications in the first six months of 2007, up 7.3% over the same period last year. These are official statistics compiled by China Council for the Promotion of International Trade (CCPIT). For more details, please take a look at this article from Xinhua News.

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It is interesting to note that China now ranks third-behind Japan and the United States, but in front of the European Union-in terms of the total number of patent applications filed. Some argue that that China will soon transform itself into an innovation nation due to the skyrocketing number of patent applications filed in recent years. But is this the case?

The number of patent applications filed is one indicator of the rapid development in innovation. However, it must be borne in mind that patent applications may not accurately reflect innovation. Most of the patents filed in China are for new design appearance or new model, which does not necessarily involve great technical innovation. Also, in order to boost patent applications, some local governments have provided patent funds to local enterprises and science institutes for them to file their patents, resulting in the sharp rise in application number.

Nonetheless, Beijing's relentless efforts to raise IP awareness among its people must be applauded. After becoming a member of the World Trade Organization, China has strictly abided by the WTO obligations in terms of IPR protection and has been dealing with IPR disputes with the United States, the EU and Japan in a cooperative way. I believe that with the remarkably accelerated industrialization that is taking place now in China and CPC's continuous commitment to strengthening technological innovation and developing high technology, it is only a matter of time before China becomes the next global technology powerhouse.
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General 0 Comment November 8, 2007, 5:22 pm

EDWARD LEHMAN MAKES CHINA PRODUCT LIABILITY SPEECH AT COLUMBIA LAW SCHOOL

November 6, 2007

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Edward Lehman, managing director of the firm LEHMAN, LEE & XU was invited by Professor Benjamin L. Lieberman, Chairman of Columbia University School of Law's China Law Studies Program, to address the Global Justice Forum, Columbia Law School's Board of Visitors, and Columbia University law students and faculty regarding "Current Developments in Cross Border Litigation". The event comes on the heels of the controversial speech by the President of Iran at Columbia University last month.

Mr. Lehman was a co-presenter with Professor Lieberman and Professor Donald C. Clarke, director of China Law Studies at George Washington School of Law, with the trio discussing efforts to bring products liability and other plaintiff's actions on behalf of Chinese citizens and/or victims of Chinese corporate misconduct both inside and outside of China, including the U.S. action on behalf of Chinese aviation accident victims (Baotou, Inner Mongolia air crash), the Mattel case, the cough syrup case brought in Spain on behalf of Panamanian victims, and the efforts to use plaintiff's litigation mechanisms in China's own courts.

The event was covered by local and international media, including Newsweek, New York Times, and the Wall Street Journal , and many questions were asked of panellists regarding the recent apology by Mattel for the company's design and quality assurance failures, and whether Edward Lehman will lead an action on behalf of Chinese OEM's against Mattel in the United States. Independent of this event, Mr. Lehman has stated that, "The time is right to bring these actions against companies like Bombardier, GE and Mattel in Chinese courts to hold them accountable to the Chinese legal system," indicating the firm's intention to launch the Baotou air crash matter in Chinese rather than US courts.

Other notable speakers at the Global Justice Forum were David M. Schizer, Dean and the Lucy G. Moses Professor of Law, Columbia Law School and Robert L. Lieff, founder of Lieff Cabraser Heimann & Bernstein LLP, a graduate of Columbia Law School and a recent donor of USD 4 million for funding of a Global Justice chair at Columbia Law School. (Robert Lieff, one of America's most successful plaintiff's lawyers and Edward Lehman have been long time friends and collaborators over the years.)

LEHMAN, LEE & XU is a founding member of the Global Justice Forum, a world-wide network of lawyers, academics and law firms who work together to promote justice and transparency in legal systems and matters through out the world. Edward Lehman is a member of the Global Justice Forum's Board of Governors and has been a speaker on China issues at meetings in London, Paris and Rome.
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Lehman Affairs 0 Comment November 6, 2007, 6:24 pm

Food safety law amended

November 5, 2007 - by Maggie Xu

In the wake of headline food scandals, China's cabinet recently approved in principle a draft law on food safety to address the "weak points" in food production, processing, delivery, storage and sales.

"Food safety is vital to improving people's lives and health, so relevant legislation must match national efforts of safeguarding food safety," said Chinese Premier Wen Jiabao

The draft law, based on the existing Food Hygiene Law, was discussed at Wednesday's executive meeting of the State Council, which was presided over by Wen.

The draft law proposed a food safety risk supervision and evaluation mechanism to provide a "key basis" for constituting food safety standards and food born disease control measures. The mechanism demanded a "unified, timely, objective and accurate" disclosure of emergency information.

Related institutional systems covering food production, processing, delivery, storage and sales should be set up to prevent food safety problems, according to the premier.

The government would standardize practices such as food production licensing, inspection and quarantine results recording, product labeling and recalling, said the premier, adding the producer would bear major responsibilities for food safety scandals and be punished more severely.

The draft law says imported food and additives must meet China's national food safety standards while food products exported from China to other countries and regions should satisfy the compulsory requirements set by importers and pass local entry inspection and quarantine.

Local governments have legal obligations to supervise food safety and build fast and convenient aid channels to protect consumers' rights, said the premier.

The draft law will be submitted to the National People's Congress, the country's legislature, for debate and adoption.

World Health Organization (WHO) chief Margaret Chan on Wednesday expressed appreciation on China's efforts to crack down on food safety problems.

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China Law 0 Comment November 6, 2007, 11:26 am

The Emergency Response Law takes effect

November 5, 2007 - by Maggie Xu

The Emergency Response Law, which is to take effect on Nov. 1, is aimed at improving handling of industrial accidents, natural disasters, health and public security hazards.

The law, bans the fabrication and spreading of false information on accidents and disasters and requires governments to provide accurate and timely information.

This 70-article law would help minimize losses and prevent minor mishaps from turning into major public crises.

The law stipulates that "People's governments in charge of coping with an emergency should provide coordinated, accurate and timely information on the emergency and its development."

The law also states that "units and individuals are prohibited from fabricating or spreading false information regarding emergencies and government efforts to cope with emergencies."

Offenders will be warned, it says. Media organizations or web companies could lose their business licenses if their offences lead to serious consequences.

Government officials will incur administrative punishment for providing inaccurate information, says the law.

Frequent natural disasters and industrial accidents have caused huge losses of life and property in China.

Police records show 5.61 million natural and industrial emergencies were reported in 2004, leaving 210,000 people dead and1.75 million injured. Direct economic losses topped 450 billion yuan (56.3 billion U.S. dollars).

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China Law 0 Comment November 5, 2007, 2:32 pm

New Prescriptions for Growth

November 5, 2007 - by Nicole Huang

Recently, a lot of pharmaceutical companies are looking for the rapid progress through innovation in China. Their goals are not merely limited to introducing new drugs to China but even to eventually create them here. Therefore they increase their investment and attention into the department of R & D, such as the company Lilly, GlaxoSmithKline, AstraZeneca, Novo Nordisk and so on.

There are more advantages for these foreign pharmaceutical companies to improve and develop R & D here in China now because the central government pushes for more R & D in order to enhance the science and technology climate, the environment for pharmaceuticals is changing. Increased state funding to research institutions, universities and other science-and health-related bodies-many which provide resource to foreign partners in China-are being planned to help drive the industry to world-class heights. Incentives such as preferential tax schemes are now being implemented to support private R & D activity and build an enterprise-based innovation system as well.

However, there are some obstacles the foreign pharmaceutical manufacturers should be prepared to face such as China's rigid regulatory environment, high turnover and intellectual property infringement and so on. Fortunately, the Chinese government is aware of these issues and seems committed to improving the situation.
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General 0 Comment November 5, 2007, 1:23 pm

Law to give employees free arbitration

November 1, 2007 - by Maggie Xu

Arbitration services for employees in labor disputes will be provided free of charge if a new law is given the go-ahead.

Draft of the law on mediation and arbitration of labor disputes, submitted to the Standing Committee of the National People's Congress (NPC) for its second review on 24th October, proposes public funds cover the cost of arbitration committees.

According to NPC statistics, labor dispute cases in China are continuously increasing in recent years. Statistics show that labor dispute arbitration organizations at various levels dealt with 1.72 million labor dispute cases involving 5.32 million employees from 1987 to the end of 2005, with a growth rate of 27.3 percent annually.

One highlight of the draft is the granting of final decision-making powers to arbitration committees in three kinds of cases.

These are: Disputes over labor payments, workplace injuries, compensation and pensions; disputes over holidays and social security; and disputes over collective contracts.

The current regulation, adopted by the State Council in 1993, comprises a dispute-settlement process of mediation, arbitration and a trial.

The draft legislation, along with the Labor Contract Law and Employment Promotion Law, which are scheduled to take effect next January, will create a legal framework to further improve employment and labor relations.

Figures from the Ministry of Labor and Social Security show that since 1987, the number of labor dispute cases has been rising by an average of 27.3 percent a year as the country's economy grows and workers become more aware of their rights.


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China Law 0 Comment November 1, 2007, 3:35 pm

Shenzhen housing prices going down¡­

¨C by Ryan Beers


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¡­. on pre-owned homes at least it seems. The Shenzhen housing market has been soaring for well over two years now, and although the local government regularly implemented new regulations to cool investment, it seems only now are prices starting to moderate.

The Shenzhen Daily posted a story quoting that purchases have decreased by up to 70-80%, and that prices on pre-owned homes to be down 15%.

As I have commented previously, the agents at the entrance to my apartments are a pretty good indication of what is happening in the housing market, and for the past 3 months they have been twirling their thumbs. I have had discussions with some of them and they have been saying that they are selling more apartments in the Hong Kong New Territories than in Shenzhen, as they are seen to be a better investment!

Earlier this year, the agency offices looked like telethon charities programs, with agents manning phones and sealing deals. Now they are starting to look like the State owned enterprises of the not -too distant past, workers sleeping on desks or sitting outside eating sunflower seeds.
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China Culture 0 Comment November 1, 2007, 2:48 pm

Bye-bye Nestle, Hello Mengniu

November 1, 2007 - by Robin Teow

US fast food group KFC, a unit of Yum! Brands, has signed a China dairy agreement with Mengniu Dairy, China's top dairy producer, ending its 20 years supply relationship with Nestle, according to China Daily. Milk and other dairy products made by Mengniu will be sold at KFC's 2,000 plus outlets in China from next year.

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Mengniu has been aggressively expanding its sales channels beyond supermarkets and retail outlets amid stiff competition with Inner Mongolia Yili Industrial Group Co. and Bright Dairy & Food Co. in the world's fastest growing dairy market.

In June Mengniu also took over the dairy products account of Starbucks from Nestle.

Well...I guess this is another good example of multinational companies' continuous commitment to localize their products or services in China with a view to attracting Chinese consumers. This also serves as a strong warning for foreign brands about nationalist sentiment in China's flourishing consumer market. Multinationals that seek to make a virtue of the fact that their products come from a specific foreign country may struggle in today's Chinese market as confidence in domestic brands continues to rise and affluent class continues to grow.
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General 0 Comment November 1, 2007, 1:52 pm