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-Oscar Wilde

Corporate Asset Reorganization Does Not Enjoy a VAT Exemption

A new notice from the State Administration of Taxation (“SAT”) makes the illustration of VAT on asset reorganization more specific.

The SAT once issued a notice in 2002 (“2002 notice”), addressing that company’s overall assets transfer could enjoy a VAT exemption. Since this 2002 notice merely presented a principal guideline, the following practice also has to comply with the concrete instructions from the SAT on a case-to-case base. The latest notice is also a concrete order towards the transaction of a company called Dalian Jinniu Corporate, providing the outline for VAT exemption on assets transfer a step further.

Dalian Jinniu, a listed company, conducted asset reorganization, transferring its assets to its controlling company while remaining itself a listed company, the SAT considers that VAT exemption should not be applied on this transaction, which the 2002 notice provided for the overall assets transfer. Therefore, according to the notice, VAT should be collected on such transfer when a listed company conducts assets reorganization but remains a listed company. But it remains to see that whether the key for the VAT exemption is the position afterward in stock market.

Consequently, it is advised for companies to consult with local taxation bureaus for the definition for “transfer all assets”, the key to the VAT exemption based on 2002 notice. And an evaluation in advance is recommended to avoid dispute on taxation issues.
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China Blawg's thoughts 0 Comment December 15, 2009, 9:39 am

My step 3: Unknown territory

Having graduated in 2008, the year that saw the collapse of Lehman Brothers, the nationalisation of banking institutions, and the overall entry of world’s nations into an economic slump, I knew that things were not going to be a walk in the park!

My plan was already set out. Finish university, take a year out in the aid of differentiating myself from my peers and competition, and then pounce on the Legal Practice Course, commencing in September 2009 (I’m a British Law student by the way) and whilst on the course secure a training contract at a London based law firm.

Ok, so I did finish university, achieving a 2.1 Honours Law degree from City University, London. Step 1 complete. I did take a year out, and during that period managed to secure a placement on the summer associate program at the Beijing office of Lehman, Lee & Xu, ok bingo Step 2 complete. So now I’m sure you’re thinking that I’ve moved onto Step 3, and am writing this from the comforts of my luxury penthouse in central London? Well if you thought so you’re wrong! Firstly, if I had gone back to do my LPC I would most likely be commuting from my parents house (the joyful consequences of student debt, and the fact that in the UK there is no student funding available for the LPC), and secondly I haven’t gone back, I’m still in Beijing!

What happened to Step 3? Well everyone knows how competitive law (as well as most industries these days) is, whether you’re aiming for a magical circle firm, or a high street firm. In law your competing against a multitude of groups such as (i) your friends and foes you graduated with, (ii) those people who did not study law, and converted their degrees in order to practice (iii) those people feeling the effects of the economy and decided to diversify their backgrounds by entering into law, and (iv) those people who have been unsuccessful in previous years in attaining a training contract. Those four groups (and potentially a lot more) = a lot of competition for me!

Through the advice of good friends both here and back home, and family, (hi everyone) I decided that the best way to differentiate myself from the competition would be by staying on in Beijing for a few extra months and gaining some vital experience working at Lehman, Lee & Xu. After weeks of tooing and throwing I made my mind up! LPC cancelled (deposit lost, but at least I didn’t have to pay the full course fees), flights back to London Heathrow pushed forward, and new flat sorted; I was staying!

The decision to stay was a hard one. I felt I had to stick to my plan, and that there was no alternative. However you look at it, be it an opportunity or a risk, I feel that it has proven to be one of the best decisions I could have taken for my future career. It’s not like you get the opportunity to come to China everyday now is it?

I have learn a lot from this summer associate program at Lehman, Lee & Xu, and are grateful to them for allowing me to stay on. I am currently working on an intellectual property law project, and I am in the process of finishing up an article regarding China’s Anti-monopoly legislation. Both areas of law I have a great interest in.
I have met some great friends out here, who know doubt I will keep contact with for the considerable future, and I have had some amazing experiences that I will never forget. By amending my step 3, I have steered of the cautious road I was due to be taking, and look, with excitement, to charter into unknown territory.

Have you had any thoughts about changing your step 3?

Articles of interest:

New York Times:
http://www.nytimes.com/2009/08/11/business/economy/11expats.html?_r=1&pagewanted=1&em

Associated Press:
http://www.google.com/hostednews/ap/article/ALeqM5ia3rBdE-M6v9zMS8tflfE1qGPiRAD9AR58B80
Sam Engutsamy
November 2009...

China Blawg's thoughts 0 Comment November 6, 2009, 2:44 pm

Opportunities in China’s Water Industry

Quinn P. Stepan

“When the well is dry, we know the worth of water.” Benjamin Franklin, Poor Richards Almanac

After almost 30 years of double digit economic growth and the migration of hundreds of millions of villagers to cities, gaining access to clean water becomes a bigger issue by the day for many residents of China. If the current trend continues, China’s water supply, or lack thereof, has the ability to halt industrial and population growth in one of the worlds most expansive and dynamic economies.
The majority of China’s 270,550 sq km of water is polluted, threatened by drought or being overused. I have read some reports estimating as much as 90% of China’s water supply is polluted. This, of course, is a by product of rapid economic expansion. Today, there are few restrictions or legal enforcement preventing firms from dumping waste products in large bodies of water. This is very similar to what happened in The United States during the Industrial Revolution. Overuse primarily comes from China’s dominant agricultural sector and droughts affect 15% of the country forcing some 300 million people living in rural areas to travel great lengths for safe drinking water.
In its 11th five year plan, China dedicated 1 trillion RMB in attempts to alleviate the water crisis. Most of the money will go towards desalinization and reclamation projects. There is one ambitious plan to move water from water rich regions such as the Yangtze River to the deprived Yellow River. However, moving water around is not the final answer to the problem.
Many firms, both foreign and domestic, are positioning themselves to take full advantage of the current water crisis in China. Companies looking to take advantage of this future trend range from high tech purification services to firms that deal more in water transportation and infrastructure. In the water business, having exposure to China should allow firms to benefit from Beijing’s attempts to bring cleaner water throughout a country in great need. Gaining access to clean water becomes a bigger issue by the day for many in China.
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China Blawg's thoughts 1 Comment November 5, 2009, 11:08 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

New rules for law firms to provide securities legal services

July 29, 2007 - by Fleur Chen

The new Regulation on Law Firms Engaging in Securities Legal Services came into force on May 1, 2007, there are very detailed rules regard...

China Blawg's thoughts 2 Comment July 30, 2007, 9:23 am

Warren's Wisdom

July 23, 2007 - by Will Fung



I have been doing a lot of soul-searching of late and examining what a life worth pursuing could be.

Things like family, relationship, career advancement, work, investment, wealth accumulation, material possession etc, are all elements of the many little "things" or "items" one would normally consider, to formulate one's goal in life.

I thank God for having been blessed with a very supportive family, and from time to time we share with one another inspirational words of encouragement, quotes of wisdom, and the occasional 'reminder' not to lose track of life.

I would like to share with you what my eldest brother Jay shared with me over the weekend, the wisdom of Warren Buffett. Although this may be a little 'out-dated' in terms of timing, it is never OUTDATED in terms of substance. Here it is on Youtube:
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China Blawg's thoughts 2 Comment July 23, 2007, 10:41 am

Visit to Guyana Embassy

June 14, 2007 - by Alex Clar

Being an American, my grasp of geography can be somewhat lacking. There is a quip that the U.S. goes to war so that Americans can find more countries on the map, but we've never gone to war with Guyana, so I'll admit I had to google "Guyana" when that country's embassy in Beijing invited me to a reception there. For the similarly geographically-challenged, Guyana is a small country in South America with 700,000 people, which is also the population of a medium size Chinese town.

I have to say that this was possibly one of the most eclectic events I have ever attended. This was a reception for a visiting delegation of British MBA students from the Cranfield School of Management, held at an embassy of a South American Country located in China, co-sponsored by the English law firm of DLA Piper and attended by ambassadors from Jamaica and Grenada. In addition to the students, a few other people I met included a representative of a Mexican bank, an investment banker from an Australian Bank, a German freelance journalist, a New Zealand businessman, a Chinese chemical company representative and an American who runs a steel company. Did you get all that? Yeah, I'm still scratching my head, although it turned out to be a good time.

http://blawg.lehmanlaw.com/english/uploadfiles/guyana1.jpg


During the party, we met the ambassador from Grenada (U.S. invaded this country in 1983, so no need to google this place). Showing my natural penchant for international diplomacy, I asked with great insightfulness, "So Mr. Ambassador, is the Grenada embassy just down the road?" Lucky for me the Grenada ambassador seemed like a real nice guy. He gave us a tourism pitch for Grenada and told us that he could get us great discounts because he was a former minister of tourism and now his brother-in-law was minister of tourism (with a country of 170,000 people, maybe everyone eventually gets to be minister of tourism). And, if I wasn't happy with my trip to Grenada he would guarantee a full refund. How about that? When was the last time you went to a country and they offered a 100% guarantee of satisfaction or your money back? In addition, the ambassador also described Grenada as...

China Blawg's thoughts 2 Comment June 14, 2007, 5:13 pm

eBay sales of pirated stuff

April 19, 2007 - by Ryan

Apparently Hong Kong has just convicted and jailed its first counterfeit goods dealer. The individual was advertising pirated DVDs online at the eBay website, and then mailing them to purchasers overseas. After reading the posting at IP Dragon, I thought to myself, why isn't eBay made to pay a percentage of their revenue to anti-counterfeit and pirating initiatives around the world? This could be theoretically implemented much in the same way that in some countries, cigarette companies forego a substantial portion of the per unit cost to governments in order to support the extra health services that some argue are required due to smoking.

Maybe eBay is already very involved in the ongoing war against pirating. I wouldn't know, but would be interested to find out.

BTW, until I got onto eBay, I didn't realize that Nike made Air Jordan 4's and 5's in hot pink, leopard stripes, clear plastic etc...
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China Blawg's thoughts 1 Comment April 19, 2007, 7:27 pm

Beijing taxi drivers need to beef up English!

April 16, 2007 - by Diana

Beijing has a plan...that by the 2008 Olympics, the city's taxi drivers would be able to speak the universal language of English. No doubt about it, English is really the language being spoken globally by every country in the world. It is estimated that about one-fourth of the world's population can communicate to a certain degree in English. China is one of the most populated countries in the world, and Beijing would certainly top the list as one of the most densely populated cities in the world and there are certainly more native speakers of Chinese, however, English is the language China wants to use to integrate its citizens into an increasingly globalised world.

http://blawg.lehmanlaw.com/english/uploadfiles/beijing%20taxi.jpg


Given this, sometimes it is extremely baffling that while many of its residents understand a sentence or two in English, and the ladies at Yashow or Silk Market, whichever takes your fancy, are certainly masters of conversational English, it is not easy to find a taxi driver who knows English well. I have often had friends complaining that they would die taking taxis in Beijing if they themselves did not know the basic phrases of "yi zhi zou", "you guai" or "zuo guai", because the drivers are certainly not going to know "go straight", "turn left" or "turn right".

Sadly, if things stay like that, the hundreds and thousands of tourists visiting Beijing for the 2008 may be a little frustrated to find that just getting around is tough. And this may reflect badly on the city, which I am certain Beijing does not want. So what to do? Well one is for sure, China is completely serious about learning English and I am convinced that the Olympic Committee has a plan tucked away somewhere. As for tourists, I would say, just have your guide and phrase book ready.
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China Blawg's thoughts 0 Comment April 16, 2007, 10:59 am

China personal banking

March 29, 2007 - by Ryan

I think poor Chinese bank staff are going to have a real issue when the Beijing Olympics arrive next year. The myriad of little administrative troubles that we have all come to know and love when partaking in some China personal banking are going to send the influx of Olympic tourists absolutely bonkers.

The newcomers are going to be fooled by Beijing's excellent customs entry at the Capital Airport (which I think is perhaps the quickest and least painful I've been through), and will think that they can tackle this place with ease, but when they get to the banks, there will be major verbal explosions in every language of the globe. And that is just going to be when they see the size of the queues. Some may say "don't worry, it will be easy for the banks to put on more counter staff...". My first response would be - if it's so easy (and I imagine it would be) why the heck isn't it being done now? My second response will probably be - decreasing queue sizes is not going to get over the massive issue of unnecessary procedures 手续 from what are supposed to be providers of a service.

Ok, after that little rant, I should say that the banking here has come leaps and bounds compared to what it used to be. I tend to have a bit of a cup's half full approach, but in my experience, the banking has become far more convenient than it has been previously. I also like the really low level of fees compared to back home in Australia, fees being a major gripe back there, and the fact that some are open on the weekends.

Let's just hope that by next year, some thought and action is given to how the Olympic onslaught of China-unaware tourists are going to easily access their money. My advice to them is the following: just because it's your money doesn't mean they are going to give it to you; WTO arguments will get you nowhere; and, serenity now serenity now.
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China Blawg's thoughts 0 Comment April 2, 2007, 10:04 am

Winter Wonder

March 19, 2007 - by Diana

Beijing in March, no longer are we chilled to the bone nor is it mandatory to put on piles and piles of clothing. On a good day, it is even possible to ditch the long heavy coat and slip on a pair of sunglasses. Not to mention the fact that it is no longer dark as soon as 6pm rolls around continue to remind me that spring is just around the corner.

Having grown up in a place where although cold and wet, winter at its best was around 9 degree Celsius. I have never had to wear a duck down coat, nor have I ever seen snow. Some people ever went so far as to say I have never experienced the real beauty of winter. And I think I would have to agree. This is my second winter in Beijing and I still love it. Sure, there were times where I was disgruntled with the freezing weather and gusty winds, but there was also the Great Wall capped with snow that runs for miles and miles, frozen Houhai lake where the nimble (or the not so nimble) enjoyed ice-skating and the undaunted swam in its water. There were also the trips to Harbin in appreciation and awe of its famous snow sculptures and light show at night as well as the steaming hot pot dinners that were fattening, yet delicious.

http://blawg.lehmanlaw.com/english/uploadfiles/winter1.jpg


http://blawg.lehmanlaw.com/english/uploadfiles/winter2.jpg


http://blawg.lehmanlaw.com/english/uploadfiles/winter6.jpg


I cannot wait for spring to come and at the same time I look forward to another great winter here in China.
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China Blawg's thoughts 0 Comment March 19, 2007, 11:58 am

IP Rights and Economic Development

March 16, 2007 - by Stan

OK, yeah, this general topic is not news. In fact, this is a very old topic amongst economists and policy analysts. The main question is the appropriate level of IP protection/enforcement in developing countries, and should they be treated differently from other countries.

Interesting post on IP Dragon about a recent interview with the deputy director of SIPO. Note that the State Intellectual Property Office (SIPO) is not, contrary to appearances, the national IP office. It is really the Patent Office. Trademarks and copyrights are dealt with by other agencies, not by SIPO.

Regardless, the interviewee, Zhang Qin, makes a distinction between trademarks and copyrights, on the one hand, and patents on the other. This distinction is based on the old argument that technology is crucial to development, and therefore a rigorous patent enforcement regime is harmful to economic development. Trademarks and copyrights should therefore be strongly enforced, but not necessarily patents. Funny how this gets the SIPO off the hook with regard to criticism of IP enforcement in China, but SAIC (trademarks) and the copyright office will take the blame. Nice politics, and not even a little subtle.

Anyway, there is no doubt that technology helps development. The trick is to figure out when to stop the lax patent regime and switch over to a more robust system once your economy is sufficiently developed. Some would say that the right time is when you start innovating. I think it needs to be done earlier, to spur that innovation domestically, and many policy wonks in Beijing agree with me on this. The laws have been changed to reflect this, most notably the Technology Transfer Law several years ago. I think China is well into that switchover period and has done so by design.

So really we are back to an enforcement issue, not a Patent Law reform issue (for the most part). Hard to say whether the old economic development arguments are just being used in a self-serving manner, or if there is a sincere feeling in certain policy circles here that this is a legitimate issue.

I am a cynic, and an IP lawyer, so my feelings on this are rather obvious.
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China Blawg's thoughts 0 Comment March 16, 2007, 7:18 pm

Random Pondering on the NPC...

March 15, 2007 - by Juan

Stan's post on the comparison between Chinese and US-style politics is something that I would have thought perplexing 6 months ago when I first set foot in China.

Life in this country has, however, proven that the rapprochement of the two cultures is not only happening, but you can also publicly talk about it (special thanks to Yao Ming).

A couple of days ago, CCTV9 held a televised debate on the Rule of Law (YES, on THE RULE OF LAW) in China. Yang Rui, CCTV9's "Dialogue" (he often forgets that a dialogue needs to have more than one person, and it's not about preaching overcooked pseudo philosophical statements) presenter, decided to close his program with JFK's "It's not about what your country can do for you, but...blah blah blah".

Minutes before, an NPC deputy had contended that the roots of socialism are now suitably established in China. That probably explains why China's Communist Youth League, the "helping hand and reserve army" of the ruling party, is setting up a joint venture with foreign investors to offer online poker to the nation's young people. (Here's the FT Story)

The official language is in accordance with their international "intentions". An example of this is Bo Xilai's recent contention: "what China has done for Africa is out of a sincere feeling, out of friendship from the bottom of the heart forged in past decades".

What Stan has highlighted is that in China, at least, the official rhetoric is still well-intentioned, talking about issues such as education, health, helping rural residents, and improving the environment - all the elements of a "harmonious society".

Having said this, I'd only like to quote a great article on Thailand's recent military coup:

"When rising income inequality is unmatched by economic opportunity and rich-poor divides widen in cities, as well as between them and the countryside, resentment and envy can fester.

Those conditions are evident in many parts of Asia. They are fertile soil for demagogues who pose as champions of the poor, who skillfully manipulate mass opinion, and who claim that their popular mandate and political mission put them above the law
."

Feel free to make your own conclusions.
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China Blawg's thoughts 0 Comment March 16, 2007, 9:51 am

Beijing's changing streetscape (up close)

March 13, 2007 - by Ryan

What's happened to the streets of Beijing? Last time I was here the rows of shop fronts and stalls were so continuous and repetitive that you were always only 20 steps from the closest xiaomaibu convenience stall or magazine stand. Now it seems one needs to get in a taxi just to buy a bottle of Wahaha water, and cross town to get a 25 kuai haircut.

Upon first arriving and noticing the distinct lack of convenience, I assumed that it must only be within the Chaoyang area, but I traveled back to my Haidian haunts and realized that it had also been affected. The only difference I could see was that instead of the Chaoyang apartment complexes and shopping malls, Haidian was full of new governmental buildings and impressively named research institutes.

I assume that the changing streetscape is a conscious effort to clean up the city for the 2008 Olympics as well as just generally resulting from the development occurring. Whatever the cause, I think that Beijing, certainly within the Chaoyang CBD district, needs a return to more frequently located convenience stores - even if we have to swap xiaomaibu for 7/11.

I posted a link last week to a CCTV article regarding the Chaoyang CBD. In that article, a senior urban planner from Chicago, Mr Benet Haller, said the following about the current state of the CBD:

"To me it's not what a central business is all about. It is about density, it's about having a ground level that's very active".

I couldn't agree more. Although he is perhaps more specifically referring to upscale entertainment and dining venues within the CBD, his comments could equally apply to other areas of Beijing and to the nature of development being undertaken here.

Here again is the link to that article:
http://www.cctv.com.cn/lm/133/42/54696.html

A good article written back in 2002 takes a few guesses at what would happen to Beijing's xiaomaibu in the future (which is obviously now the present), and you may find it interesting to compare with your own view of Beijing's current streetscape. You can find it at the following link:
http://www.crystyl.com/writings/cw11062002_The_Death_of_the_Salesmen.php
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China Blawg's thoughts 0 Comment March 13, 2007, 12:36 pm

Beijing's changing skyline (from a distance)

March 9, 2007 - by Ryan

Having just returned to Beijing after a two and a half year absence, I was keen to see how the city had changed. I recall in the past leaving for periods barely exceeding three months, then returning to find that my favorite restaurant, hairdresser, convenience store, and watering hole (which were probably all adjoining each other) had been torn down to make way for a new government building or six lane highway. When I left, the Chaoyang "CBD" area was the sum of about four buildings, and I thought the title was a touch over-ambitious.

The changes struck me as soon as I hit the Beijing airport tarmac. I recalled the current airport terminal just being finished, but outside the airplane window I could see an almost-finished and absolutely gigantic new terminal with what looked like a high speed rail system shooting out the end. It looked fantastic, and rammed home to me the city's speed of change, as well as my length of absence.

Once into the city perimeter, although there was a lot of development and new buildings, nothing really had seemed to change - until I got a glimpse of the new CBD skyline. It is a genuinely cool skyline, and I hope the area does transform into what some have dubbed the "Oriental Manhattan".

In the CBD, even at this early stage, there is a fusion of differing styles and eras, and it keeps reminding me of Hong Kong. Of course the two cannot be compared, but if in 2004 someone told me that Beijing would possess even a mere hint of Hong Kong's perfect eclecticism, I would have considered them ignorant dreamers.

Anyway, to put in bluntly, when I see Beijing's CBD I'm often reminded of Hong Kong. If you disagree, feel free to let me know.

Although a bit out of date, I liked the following article from CCTV on the topic: http://www.cctv.com.cn/lm/133/42/54696.html

I agree with some of the concerns raised in the above article, and will provide my views on it next week.
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China Blawg's thoughts 0 Comment March 9, 2007, 1:50 pm

Education and the Legal Profession

February 7, 2007 - by Juan

On his latest Financial Times column (Feb 1, requires subscription), Mr. Martin Wolf sways aside from his usual world finance columns to one on education. Condemning a utilitarian approach to education policies, Mr. Wolf stands for the idea that education is a goal in its own right. In his own words:

"The aim of policy must not be the mere maximization of gross domestic product. Understanding is a good in itself. A society that has forgotten this is impoverished, however high its GDP may ultimately become".

I could not agree more. This very philosophical statement is what I think keeps many of us lawyers in our profession. As a lawyer, it is fascinating to see that every new case represents a new study (sometimes of the oddest fields of science or metaphysics), consequently widening your mind and understanding. By this I mean that the practice of law is not only composed of law itself, but to be filled up by the knowledge of an infinite range of domains. And with this conviction I feel that it should be applied within the realm of law as well.

I am always intrigued by those legal practitioners that do not want to know about certain matters, under the poor argument that it's not in their field (I am likewise appalled by those people living in China for years who are just about able to say kneehow). Law firms that support the idea of education as a "worthwhile end in itself" (doing it through internal legal practice groups, information exchange, encouraging participation in seminars, presentations, fora, etc.) are the breeding grounds of the best lawyers.

Voltaire had already said it in such an enlightening way: Il faut cultiver son jardin. (We must cultivate our garden)

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China Blawg's thoughts 0 Comment February 7, 2007, 12:30 pm

Chinese tourism most welcome to Colombia

February 3, 2007 - by Juan

Unprecedented information for Chinese tourists: on a unilateral and non-negotiated decision, the Colombian government has decided to allow (from the 1st of January 2007) Chinese citizens to enter its territory without need to apply for a visa.

This news must have really caught the mainland's government off guard. The measure, first of its kind in the world is of a major political importance, and reflects the South American country's ambitions to strengthen its ties with the Asian giant.

For a tourism rapprochement there is however something to overcome, since China has not yet granted Colombia the Approved Destination Status, making its tourism promotion very restricted.

Whilst the trade balance between the two nations reveals, as with the rest of the world, a Chinese export domination (in this case amounting to a US 1.7 billion deficit for the Colombians) I still wonder if the China National Tourism Administration will react to the news.

The truth is that Colombia has not yet recognized China as a market economy, and will probably have to wait until that moment in order to be on the 132 (so far) country list. Yet it appears that in this commercial relationship, one of Colombia's means to protecting its few relevant sectors (textiles, leather manufactures, to mention a couple) is the possibility of using the WTO's "third country comparison mechanism". This means that whenever dumping suspicions arise, the WTO will use the alleged product's price in a third country in other to determine whether there has been or not an infraction of international trade rules. Recognizing the market economy status will make this important tool (specially for a country like Colombia) vanish.

With this in mind, the tug of war appears far from over...I believe however that after the bleak years of the past, Colombian tourism and hospitality should not be deprived from the possibility to present its unique landscapes, sites and culture to the 34 million Chinese who travel abroad.

Leaving the politics aside, if this post encourages at least one of them, it's a good start.

In the meanwhile: whilst Beijing discusses about Starbuck's shop in the Forbidden city, I still wonder when I'll be able to sip the best coffee in the world on a Juan Valdex shop.
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China Blawg's thoughts 0 Comment February 5, 2007, 9:15 am

Forbidden City + Starbucks = Joke?

January 21, 2007 - by Robin

So what is the big hoo-ha about?

Recently, there is a campaign to kick Starbucks out of Forbidden City. The campaign was initiated by a China Central Television (CCTV) anchorman, Rui Chenggang, who argued that the coffee shop should be removed from one of China's most acclaimed heritage sites as it humiliated Chinese culture. His view is in fact shared by many Chinese who equally think that one of the world's most recognizable trademarks is an eyesore in the ancient city.

http://blawg.lehmanlaw.com/english/uploadfiles/starbucks.jpg


Rui also argued that the American coffee giant in the Forbidden City had become a laughing stock among the upper class in western countries since it was not meant to be an upper class thing. Hence, it should not exist in a place like Forbidden City.

Overspreading more than 720,000 square meters, the Forbidden City stores 1.5 million relics, comprising one-sixth of the total relics in Chinese museums. It receives more than 1.6 million overseas visitors on average every year. Starbucks was invited by the museum administration to open an outlet there 6 years ago.

I personally think that a decision now to revoke their business license would seriously make a mockery of Chinese culture. What kind of harm can a coffee shop possibly do to Chinese culture? Why are these people taking it so seriously? By saying what they are saying, do they mean that 5000-year-old Chinese culture pales in comparison to Starbucks' 36-year history? Foreign brands in every imaginable form are sprouting out at the speed of light at almost every corner of every street in China these days. Is China going to lose its strong culture because of this? Don't forget about the demand-supply theory. Do Starbucks or other foreign brands in China only serve foreigners? Why are there so many Chinese who still think that foreign brands are a symbol of wealth and status?

Please do not get me wrong. I am not saying that we should worship or accept everything that is western. Neither am I saying that China should be open to westernization. That is not going to happen anyway in view of its uniqueness and unparalleled history. We have to recognize the fact that the world is flat nowadays and it will only get flatter. Like it or not, globalization is the way to go forward. The world belongs to all of us. In order to co-exist in a harmonious way and to promote common development, we need to adopt a more commonsensical approach. Instead of complaining, why don't we do something constructive to promote Chinese culture overseas? China is already catching up with many of the big boys in many fields from economy to Internet population to automobile, why don't we make culture part of the agenda? With Chinese people's will, perseverance and creativity, I won't be surprised if I find Jiaozi or Kangshifu noodle restaurants in the vicinity of Statue of Liberty or Buckingham Palace in the near future. Would not that be cool?

To me, so long as Starbucks is abiding by the terms of the contract and they are not doing anything belittling Chinese culture or detrimental to the historic integrity of the Forbidden City, it is unreasonable to ask them to leave.
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China Blawg's thoughts 0 Comment January 24, 2007, 9:25 am

Draft Labour Law - update

January 19, 2007 - by Rikin

After what was seen by many around the world as taking up a blatant and insistent stance against the proposed labour reforms issued earlier last year, corporations are now beginning to retract their views.

Notably, Nike last month disassociated itself from the views expressed by the American Chamber of Commerce; namely that the Draft in fact goes the opposite way to protecting workers' rights, and that its inception will lead to the migration of many large MNCs from China to other, more viable countries such as India. Such a view has been perceived by many as an indirect threat: The American Chamber of Commerce (AmCham) represents over 1300 corporations, including 150 Fortune 500 companies...definitely the"big boys in the playground".

Clearly, any company that plays the equal rights card with one hand cannot possibly risk being publicly seen playing an opposing card with the other, without seriously running the risk of losing all genuine credibility in the future.

"Nike has a long history of actively supporting the Chinese government's efforts to strengthen labour laws and protections of workers' rights" (says Nike Vice President Hannah Jones in her response to the AmCham views). Can this therefore lead us to believe that the initial views expressed by AmCham are now no longer shared by Nike (publicly)?

We are told that when the AmCham gave their opinion on the Draft, Nike "...had yet definitely to state a position either internally or externally to AmCham on the draft labour law...". I emphasise the word 'definitely'.

In doing so, I distinctly note the lack of a statement to the effect that 'no such view was ever expressed by Nike'.

I also note the fact that it took two a half a year for Nike to publicly respond to the AmCham's statement, which was issued in the spring of last year).

Could it be the case, that after having (had) expressed (on their behalf) their views against the reforms that propose to improve the working lives of thousands of workers, and instead shamelessly favouring profit margins, certain people are now blushing:- realizing the long term implications that may ensue- and now carefully treading back one step onto more friendly and familiar ground - where their true thoughts and motives are more sufficiently hidden from the public so as not to attract criticism, or jeapordise their future, or any potential stake therein?

Would a capitalist corporation ever do such a thing? Surely not.

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China Blawg's thoughts 0 Comment January 19, 2007, 3:57 pm

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

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—from investigative reporters to movie critics—may 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

Thanksgiving: More than just Food and Football

November 22, 2006 - by Tim Cronin

This past weekend marked one of the most monumental college football games in American history. The #1 Ohio State Buckeyes were taking on their arch-rivals the #2 Michigan Wolverines in a match that may easily decide who proceeds to the national championship in January. After a brief nap Saturday night, I awoke at 3:00 AM and made my way to Frank's Bar so that twenty years from now I won't have to tell my kids that daddy missed the big game because he was in China. Surprisingly, however, what I will remember most from the experience will probably not be the nail-biting 42-39 ending. Although the OSU victory was certainly thrilling, it could not rival the feeling of being blindsided by images of Santa Claus on the television screen. Seeing the iconic Christmas figure made me realize how out of touch I am with American culture.

Old man Christmas not only reminded me to start collecting presents for my friends and family back home, but also that I had almost rushed past the lesser-known American holiday Thanksgiving. This Thursday's festival of food, family, and football should be a great way to bring me back to my roots for a night. After interning at LLX for the day, I will head back to Haidian District to meet my Peking University family at Kro's Pizzeria. Here we will enjoy a traditional Thanksgiving feast comprised of turkey, mashed potatoes, stuffing (I don't even know what this "stuff" is actually made from), and pumpkin pie. Then comes my favorite part of the holiday: complete relaxation until I regain the capacity to walk. The rest is well-deserved since a normal Thanksgiving Day consists of watching parades and football all day on TV followed by a few cocktails and the largest meal of the year.

After describing the features of the American holiday at lunch yesterday, Will asked what the history was of this celebration. I realized that I had focused far too much on the modern, opulent characteristics of Thanksgiving and failed to convey its importance to American culture. Although now the holiday does tend to focus on simple leisure, the tale of Thanksgiving's origins points directly to two important themes in American history.

The first Thanksgiving occurred at Plymouth, Massachusetts in the fall of 1621. The pilgrims, who had crossed the Atlantic in hopes of escaping religious persecution in Europe, found themselves under very harsh conditions when they arrived in America in 1620. By the end of the brutal Northeast winter, almost half of the original settlers had perished. When 1621's autumn proved to be a bountiful harvest, the pilgrims decided it was time to give thanks for their fortunes. The result was a week long festival of food and games celebrated in harmony with the local American Indians—without whom the settlers probably would not have survived the previous winter.

This fusion of English and Native American cuisine and leisure activities gave birth to the first definitively American holiday. The process of sharing and learning would later be described as America's cultural melting pot. Despite the holiday's modern focus on food and football, the two traditional themes of giving thanks and cultural exchange have not been lost. This Thursday, American families of English, American Indian, Chinese, German, African, Mexican, and any other descent imaginable will gather around the dinner table and thankfully reflect on their fortune.
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China Blawg's thoughts 1 Comment November 23, 2006, 6:07 pm

The power of Junbo!

31 October 2006 - by Steven Kuo

On the evening of the 27th of October, Hao Junbao Attorney was given the exciting task of lecturing at the China University of Political Science and Law (CUPL). As I was just about to dig into my slice of birthday cake, (might I add Happy Birthday to all of those who have their birthday in October) Hao Junbao (Lv shi) asked if I would like to attend the lecture at CUPL to give me an insight as to how student life is like in China. I was honored by this prospect, and accepted to go as one of Hao Junbao's Groupies, fellow colleague Lily Han also attended as Hao Junbao's Assistant on that night. As we arrived outside the University campus, we were greeted by a fresh new face called Zhou Zhi Hang who had just recently been elected Chairman of the Law society at CUPL. He escorted us up-stairs to a large classroom packed with around50 students, all eager and ready to listen to Junbao's lecture on Transnational Litigations. After about of an hour and a half of none stop lecturing about plane crashes and eye infections, the students got to ask questions, to my amazement the students had lots of question to ask and were still very intuitive to Junbao's Jokes and responses. As the lecture drew to a close, one of the students had even approached Junbao for his signature (Wow...). At the end of the night, it made me realise that this sort of work could make a difference to the understanding of law in China.
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China Blawg's thoughts 4 Comment November 6, 2006, 8:46 am

A weak economy?

31 October 2006 - by Joi Kush

Since I am an international studies major, I have been assigned to read various articles in which intricately outline the possibility of China's economy surpassing the United States. Most of the articles argued that China's economyis growing at such a fast pace that that the United States could never catch up with the escalating GDP due to the United States rising trade deficit and outrageously large national debt. After reading fact after fact, I became convinced that China would create this transition of power sometime in my lifetime. However, now that I have witnessed and read about the vast inequalities between the rural and urban societies of China, I am now convinced that China has a long road to haul before they can supersede the United States.

It was not until a couple of weeks into my stay in Beijing that my skepticism engulfed my previous knowledge of China's economy. I remember walking through the streets of Beijing trying to associate myself better with my surroundings while reflecting on the environment around me. I found myself amazed by the disparity between one section of the city over the next. It seemed as if every other block I was transferred into a different time period of Chinese history, one block consisting of primarily degenerated buildings that lackedmodern innovation and one block consisting of high-tech postmodern skyscrapers.

My astonishment with the economic disproportion continued to grow as I traveled outside of Beijing to the province of Shanxi. During my stay in Taiyuan, Pingyao, and Datong I could not help but critically analyze the structure of the economy within these cities. I am not an economist, but it seemed as if these cities heavily depended upon a low-income industry which essentially hurttheir possibility of development within their regional economy due to lack of funds for reinvestment. However, I realized that this view was not an empirically researched thought; hence, could not be considered an educated valid analysis.

After I returned from my trip, I began to inquire about the differences in China's economy. It did not take long for me to find articles on the internet which emphasize the fact that the economic disparity in China is profound. For example, the current peasant makes an annual income of US $300 and a typical person from Shanghai makes US $4,000. In 2001, China reported that more than 29 million people were living off of less than one dollar (US) a day. Furthermore, China's current Gini coefficient (a measure of income inequality on a scale of 0 to 1) of 0.45 has suggested that economic inequality has surpassed that of the US and UK. Most surprisingly, social protests on economic inequality throughout China have grown from 58,000 in 2005 to 74,000 in 2006. Paradoxically, many of these protests end up being non-influential in neither regional or national government decisions about the economy due to thefact that most protests are stopped through bribes. Hence, the issue is only delayed and not resolved.

Overall, China has made several strategic steps forward with economic reformation since the 1970s; however, the nation still falls short when doing a comparative analysis with the United States' economy. Perhaps one day, Chinaand the United States will be throat-to-throat in claiming economic supremacy; however, the United States still holds strong.

Ironically, even though China still remains a reforming nation, the United States still depends heavily upon Chinese investment in US dept. Perhaps when reflecting upon this fact one could ponder what really constitutes a weaker economy, one in which has a large economic disparity between the rural and urban populations or one in which has more than a trillion dollars worth of national debt and a rising trade deficit ratio?

Any thoughts?
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China Blawg's thoughts 0 Comment October 31, 2006, 7:01 pm

Life is measured by moments of happiness!

October 25, 2006 - by Natalia

I browsed casually through advertisements on a website, being curious about what is happening in Shanghai on that weekend and suddenly, among a bunch of unfamiliar names and clubs, a Russian household name caught my eye:

Vladimir Spivakov, together with the Moscow Virtuosi, will present masterpieces by Shnitke and Bach. 7.30pm. Shanghai Concert Hall.... Tickets 100-680.

All Russians are familiar with this name – Vladimir Spivakov, the famous violinist and conductor. He is our pride, our genius and our culture. Tickets to his concerts are hard to get in Russia as his orchestra is on tour abroad most of the time. So it was to my surprise that here in Shanghai I could actually get tickets without the usual hassle even though only one single concert was staged, where Spivakov played the role of both a conductor and soloist.

Half of the hall was occupied by “lucky” Russians. Women all dressed up with evening gowns, the smell of perfume, dim lights, magical music, a gray-haired man with a baton in hand and 20 musicians in front of him, his scholars, his virtuosos!

I arrived in Shanghai one month ago. A lot of things happen to me everyday, things that surprise me, shock me, please me and make me feel both happy and lonely in this great city. My mind is always preoccupied with everyday's problems that my new life in Shanghai presents. But when I was sitting in that concert hall listening to the music, out of the blue I came to comprehend what Maestro Spivakov meant as he once said: "Life is measured not by years but moments of happiness". That evening, that music, my new life in China, new expectations and hopes…those were the moments my life would be measured by.
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China Blawg's thoughts 2 Comment October 26, 2006, 6:56 pm