Russell Peter Brown’s Consultancy Raided in GuangZhou and Shenzhen by Chinese Government Officials Seizing Material Infringing upon the LehmanBrown® Trademark
December 10, 2013- Beijing – On April 25th, 2013 a final Higher People’s Court Administrative Judgment concluded that the LehmanBrown® trademark is registered solely to Home & Garden Limited (hereinafter “HGL”) (G.H.Z.Zi No. 686 & G.H.Z.Zi No. 690). Continued use of this trademark by a consultancy in Mainland China, unlawfully claiming the use of the trademark “LehmanBrown,” (hereinafter “the Consultancy”) and its Legal Representative, Russell Peter Brown, who is the Chairman of the British Chamber of Commerce in China, resulted in Government led Raids of Russell Peter Brown’s wholly foreign owned consultancy (the “Consultancy”) branch offices in Guangzhou and Shenzhen. Under Chinese laws, policies, and regulations a “Legal Representative” who infringes on an identical mark of a granted trademark owner (as Russell Brown currently does) is liable for criminal and civil damages for such infringement. To that end, the Chinese administrative authorities have unilaterally and independently initiated a series of raids on Russell Brown’s Consultancy seizing infringing materials.
Initial “evidentiary raids” were conducted by officials from the Chinese Administration of Industry and Commerce (“AIC”) pursuant to Chinese law, and at the request of attorneys representing HGL and their exclusive licensee LehmanBrown® CPA with registered offices at 10-2 Liangmaqiao Diplomatic Compound, 22 Dong Fang Dong Lu, Beijing 100600 China see www.lehmanbrowncpa.com. These trademark administrative raids conducted by the local branches of the AIC were executed against two branch offices in Guangzhou and in Shenzhen of the “Consultancy” (which is not a Chinese CPA firm as advertised) for which Russell Peter Brown is the Legal Representative. Since the initial “evidentiary raids,” Chinese Government Administrative officials of the AIC have returned to the same two branch offices, one in Guangzhou and one in Shenzhen, in search and seizure of additional evidence against the Consultancy and its Legal Representative, Russell Peter Brown, who also ironically serves as Chairman of the China Britain Chamber of Commerce.
This Chamber of Commerce is a Chinese organization, formed under the Ministry of Civil Affairs and the Chinese law “Provisional Regulation that Govern Foreign Boards of Commerce in China of 1989″. The China Britain Chamber of Commerce, which recently celebrated its 20th year, is an organization that has publicly encouraged intellectual property rights education and seminars, as well as the intellectual property proper registration, intellectual property administration, and intellectual property enforcement of rights in China. Despite this, its Chairman Russell Peter Brown, the organization, claiming the title “LehmanBrown,” which lists Russell Brown as “Managing Director” (which he is not, he is the “Legal Representative”), and the China Britain Chamber of Commerce continue to infringe on another’s intellectual property rights on their own website, directory, and in written materials.
On July 23rd, 2013, Tianhe of the Guangzhou AIC, Keji Branch executed an administrative raid against the Consultancy’s Guangzhou Branch office. Sharon Su, Guangzhou Branch Manager, clarified with the AIC officials that all cases are initially accepted in Beijing and then transferred to Guangzhou. The AIC officials checked computers, client files, financial statements, company brochures, and all related documents in the office containing any reference to the trademark LehmanBrown®.
When Guangzhou AIC officials concluded their onsite investigation, they seized documentation containing the trademark LehmanBrown®. Further, the AIC served the Consultancy with an inquiry notice and an administrative compulsory measure notice requiring Russell Peter Brown, as Legal Representative, to attend an investigative interview scheduled for July 24th, 2013. The Consultancy postponed this interview, requesting time to send a representative from Beijing in place of Russell Peter Brown, Chairman of the China Britain Chamber of Commerce, who is the legal representative of the Consultancy.
On July 23rd, 2013, after the Guangzhou administrative raids were held, the Shenzhen AIC’s FuTian Branch Office Trademark Department executed administrative raids against the Consultancy’s Shenzhen Branch office. As with Guangzhou, officials proceeded to likewise seize all documentation that proved evidence of LehmanBrown® trademark infringement. Further, AIC officials perform unscheduled visits to the Consultancy’s Shenzhen office to discovery additional evidence and inhibit any added infringing activities.
A lawsuit against Russell Peter Brown for trademark infringement was filed by HGL in the Beijing 2nd Intermediate People’s Court on June 5, 2013 seeking injunctive relief as well as monetary damages of RMB 10,000,000. HGL is looking to increase the damages based upon the results of the AIC administrative raids to 80,000,000 RMB for trademark infringement which dates back to 2003, these damages make this particular lawsuit one of the leading intellectual property cases filed in China in 2013. Additionally, Zhou Han Brown, wife of Russell Peter Brown, who previously acted as legal counsel (without a law degree) for the Consultancy, now appears to have placed herself in the role of AIC liaison. Despite continued attempts to delay, cancel, or reverse the AIC decision, officials have handed down an administrative fine of 30,000 RMB.
The Consultancy and its Legal Representative, Russell Peter Brown, have been made aware of the Court Ruling of April 25th, 2013 by the People’s Higher Court ruling where the Consultancy was represented in the final hearing not by legal counsel, but his wife Zhou Han Brown, a Beijing homemaker. The Consultancy has received multiple Cease and Desist Letters, well received by individuals calling themselves employees and in some cases “partners” within the Consultancy as well as Russell Peter Brown. Despite all legal actions being taken against the infringing parties (including the China Britain Chamber of Commerce), no effort to remedy this infringement has been shown.
HGL’s sole exclusive licensee to the trademark LehmanBrown® is LehmanBrown® CPA, founded by a group of five local Chinese Certified Public Accountants, whose website can be found at www.lehmanbrowncpa.com. Any websites or directory listing using the trademark name LehmanBrown®, not associated with LehmanBrown® CPA and without the express written consent of HGL, constitute trademark infringement and are in violation of China’s Trademark Law.
The Consultancy and Russell Peter Brown are blatantly continuing to use the trademark LehmanBrown® even in his description as Chairman of the British Chamber of Commerce in China without consent from the trademark owner in website publications and their organization’s website.
The Trademark LehmanBrown® is NOT AUTHORIZED by HGL to be used on the website www.lehmanbrown.com.
About LehmanBrown® CPA
LehmanBrown® CPA is one of China’s leading accounting, taxation and business advisory firms.
Our accounting and consulting professionals have years of solid experience in auditing, accounting, financial management and tax consulting and have worked in public accounting as well as a wide variety of industry sectors. LehmanBrown® CPA is dedicated to providing professional accounting and financial advisory services to clients with an interest in the rapidly-developing Chinese market. We are based in Beijing, with a network of offices in Hong Kong, Macao, Shanghai, Shenzhen, Guangzhou, and Mongolia and manage an extensive affiliate network providing service throughout China.
With expertise gained from years of practice in international accounting firms, multi-national corporations, state-owned enterprises, and fast-moving startup companies, LehmanBrown® CPA provides customized solutions according to each client’s specific and unique needs. With our in-depth understanding of the China market, we can assist your Chinese business to develop quickly and smoothly.
LehmanBrown® CPA knows well that the current unprecedented growth of China’s economy means that the business environment – including the legal, accounting, and taxation systems – is also changing quickly. China is now an integral part of the global economy with its own special characteristics, and LehmanBrown® CPA’s experts stand prepared to help clients succeed in this dynamic market.
10-2 Liangmaqiao Diplomatic Compound
No.22 Dongfang East Road
Chaoyang District Beijing,
Trademark Review and Adjudication Board
The Verdict on the Dispute of the Trademark No. 3013120
[No.: SPZ (2010) No. 04597]
The Verdict on the Dispute of the Trademark No. 3013121
[No.: SPZ (2010) No. 04597]
The First Intermediate People’s Court of Beijing
Judgment: [No.: (2011) Y.Z.Z.H.C.Zi No. 366]
The Higher People’s Court of Beijing of the People’s Republic of China Administrative Judgment [No.: (2012) G.H.Z.Zi No. 686] Administrative Judgment [No.: (2012) G.H.Z.Zi No. 690]
SOURCE: LehmanBrown® CPA
Published by admin on December 10th, 2013 tagged Uncategorized | Comment now »
LEHMAN, LEE & XU recognized in Asia Law & Practice’s “Asialaw Profiles 2014: The Guide to Asia-Pacific’s Leading Domestic Law Firms”
Having been associated with LEHMAN, LEE & XU for over 19 years, I am always proud when the firm is once more recognized for its excellence. Therefore, I am pleased to announce that LEHMAN, LEE & XU is a “highly recommended firm” in the 2014 edition of the prestigious publication, “Asialaw Profiles”.
This 18th edition of “Asialaw Profiles” was published on September 30, 2013, and “Asialaw Profiles” has been published annually since 1996. “Asialaw Profiles” The publication researches its candidates for recognition using questionnaires, partner interviews, client interviews and independent research. Because LEHMAN, LEE & XU has been profiled in the past by “Asialaw Profiles”, http://www.asialawprofiles.com/JurisdictionFirm/5475/162/Lehman-Lee–Xu.html, the honor of being a highly recommended law firm for 2014 becomes even more meaningful.
With over 7,000 copies, “Asialaw Profiles” provides its thorough reports to joint ventures, international corporations, financial institution, legal professionals, senior executives, in-house council, and senior corporate executives, not to mention to subscribers of “China Law & Practice” magazine and “Managing Intellectual Property” magazine, from both of which LEHMAN, LEE & XU has received multiple awards. In 2014, “Asialaw Profiles” will provide country-by-country guides, client feedback, and recommendations throughout Australia, Azerbaijan, Brunei, Cambodia, China, Hong Kong, India, Indonesia, Japan, Kazakhstan, Korea, Macau, Malaysia, Mongolia, Myanmar, New Zealand, Pakistan, Philippines, Singapore, Sri Lanka, Taiwan, Thailand and Vietnam.
The attorneys and staff of LEHMAN, LEE & XU have worked hard over the years to earn all of the accolades they have accumulated from our clients and our peers. We look forward to always providing the best legal services to all.
Hawkeye in China
Published by admin on November 29th, 2013 tagged Uncategorized | Comment now »
The New York Times (www.nytimes.com) published an article last year on November 12, 2012 that may have escaped the notice of many people about new developments in China that may one day affect how their business in that country can be conducted. This article was entitled, ‘Social Risk’ Test Ordered by China for Big Projects’ by Keith Bradshire. I would like to excerpt portions of this article those of you who are considering becoming involved with “Big Projects” in China in conjunction with a Chinese company or companies. Mr. Bradshire reported in part:
“The cabinet of China has ordered that all major industrial projects must pass a “social risk assessment” before they begin, a move aimed at curtailing the large and increasingly violent environmental protests of the last year, which forced the suspension or cancellation of chemical plants, coal-fired power plants and a giant copper smelter.
The announcement came at a news conference on Monday held in conjunction with the 18th Party Congress, at which several senior officials addressed social issues ahead of the once-in-a decade transition of power in the Chinese leadership.
“No major projects can be launched without social risk evaluations,” Zhou Shengxian, the environment minister, said at the news conference. “By doing so, I hope we can reduce the number of mass incidents in the future.”
Mr. Bradshire went on to write:
“China has led the world in economic growth for the past three decades, but it has paid a heavy environmental price. Acrid smog coats most large Chinese cities for much of the year, while many lakes and rivers are contaminated with heavy metals and toxic chemicals.
Thousands of young protesters fought with the riot police for two nights in early July in Shifang, in western China, prompting the local government to announce the cancellation of a giant copper smelter that was seen by the demonstrators as a pollution threat.
Many environmental officials in China want the introduction of social risk assessments because protests against industrial projects often involve broader issues than just the environment and may extend to questions like whether the land for the project was lawfully obtained with proper compensation for its previous owners.”
An article in the China Digital Times (www.chinadigitaltimes.com) on November 12, 2012 entitled “Industrial Projects to Require Risk Assessments to Stem Protests” shed further light on this subject. This article, quoting from a New York Times article, reported in part:
“China’s economic boom over the last three decades has depended overwhelmingly on a build-at-all-costs investment strategy in which pollution concerns, the preservation of neighborhoods and other such questions have been swept aside. But that approach is starting to backfire, posing one of the biggest challenges for the new generation of Chinese policy makers who will take over at the Communist Party Congress, which starts on Thursday.
New investment projects used to be seen as the best way to keep the Chinese public happy with jobs and rising incomes, assuring social stability — a paramount goal of the Communist Party — while frequently enriching local politicians as well.
But from Shifang in the west to the port of Ningbo in the east, where a week of sometimes violent protests forced the suspension on Oct. 28 of plans to expand a chemical plant, more projects are running into public hostility. In many cases, they are running into opposition not just from farmers who do not want their houses and fields confiscated, but also from a growing middle class fearful that new factories will lead to more environmental damage.
In response to this and other worries about the economy, a number of influential officials and business leaders in China have stepped up their calls for changes aimed at increasing the efficiency of investment and simultaneously shifting the country toward a greater reliance on consumption.”
I think it can be safely said that doing business in China requires you to look before you leap into the ever changing waters you will be required to swim almost endlessly through before you reach solid ground. Treading water is just not an option. Consult with a good law firm to find life guards who know how to keep you out of the deep end before you know how to swim.
Hawkeye in China
Published by admin on November 25th, 2013 tagged Uncategorized | Comment now »
After seeing its economy boom with investment money pouring in for several years, Mongolia’s leaders let the country get off the track and falter due to political infighting and some wrongheaded decisions about how to manage the country’s economy. Decisions made by Mongolian politicians and government officials created the perception, rightly or wrongly, that Mongolia had become a poor and risky place to invest in, thus causing the flow of investment money from all over the world to slow down to a trickle, and saw many foreigners who were living and working in Mongolia pull up stakes and leave the country in search of greener, and probably much warmer, pastures.
Mongolia is blessed with great natural resources, and has the potential wherewithal to have a vibrant and growing economy, which will be a real blessing for the long suffering Mongolian people. It could become a real land of opportunity.
So how is Mongolia’s economy looking now? It is on the rebound, a real “come-back-kid”, or at least things look that way according to an article posted on the Coventus Law website on November 14th, 2013. This article, entitled “Mongolia – Investing in Asia’s New Frontier”, is reprinted below. It will give you a good idea about how things in Mongolia are progressing now.
Mongolia – Investing In Asia’s New Frontier.
Mongolia’s vast and untapped mineral reserves have allowed it to be called the “Kuwait of Asia.” However, political issues and the lack of infrastructure have hindered the country’s ability to reap the rewards of its natural resources that are scattered across its vast expanses. FTI Consulting’s Alex Horbasz, based in Ulaanbaatar, shares his views on the country’s current and future opportunities.
Since communism collapsed more than 20 years ago, Mongolia’s political and economic systems have undergone profound change as this young democracy has moved to a market-driven economy. Foreign investors and advisers who have chartered the country’s path of reform and liberalization have often been surprised by the erratic course of progress, and observers have expressed concern regarding certain shifts in economic and political policy.
However, for the first time in its democratic history, the four most important political positions in Mongolia are in the control of one party – giving hope for a period of political stability. The President, Prime Minister, Chairman of the Great State Khural (Parliament) and the Mayor of the City of Ulaanbaatar are all from the Democratic Party. With no elections due for approximately the next three years, the government will be able to focus on addressing critical issues through objective analysis, rather than by reacting to public sentiment.
Critical to measuring the government’s success during this term will be its ability to accelerate development of the Oyu Tolgoi (OT) gold and copper project. This project has been the center of prolonged negotiations between the government and its foreign investors, including British-Australian multinational Rio Tinto. Without rapid progress on this massive project, Mongolia will find it difficult to achieve its much vaunted potential and meaningfully improve the lives of its three million people.
Of the country’s array of political parties, the Democratic Party is the most pro-Foreign Direct Investment (FDI). However, a rising tide of resource nationalism remains an impediment to growth. Therefore, the new government will need to ensure that national interests are seen to be protected. At the same time, it will continue to encourage FDI by creating a more business friendly environment. In the past, whenever laws were found to negatively impact business, government has moved quickly to revisit government policies and laws. Mongolian politicians are very practical and pragmatic.
In recognition that some existing laws and attitudes are hindering both FDI and economic growth, the government called for a special session in September to discuss the current economic crisis prior to Parliament’s 2013 Autumn Session which commenced 1 October 2013. Although no major decisions were made, an important consensus was reached by the two major parties (the ruling Democratic Party and the Mongolian People’s Party), whereby both agreed to work together in a constructive manner to find solutions to address the outstanding economic issues. In particular, special attention would be placed on ratifying the proposed amendment to the “Strategic Entities Foreign Investment Law” (SEFIL) and related mining regulation and law.
In recent years, Mongolia’s economy has become one of the fastest growing economies in the world, achieving GDP growth of 17.5% in 2011. This growth was due to two major drivers in the mining sector – coal and iron ore exports to China and a US$6 billion investment in Rio Tinto’s OT project. The growth in the mining sector also had a significant spillover effect on other sectors of the economy, most notably in the real estate sector and for the small and medium enterprise (SME) mining services and product providers. However, over the last year there have been factors in the mining sector negatively impacting the Mongolian economy:
- The softening of economic growth in China, resulting in falling commodity prices and a significant decrease in coal export volumes.
- The on-going disputes between the government and Rio Tinto related to the OT project, which have resulted in Phase II (underground mine development) being postponed. Accompanying this development were layoffs of approximately 1,700 employees and an almost 50% drop in FDI as foreign investors adopted a wait and see attitude on how the dispute is resolved, prior to committing to any new investments.
As a result of the above, the current account deficit has grown and the Mongolian Tugrik has depreciated by over 15%.
The slowdown in China’s economy has had a drastic effect on Mongolian coal and iron ore exports to China – down by approximately 50%. There is little that the government can do in this area. As the Chinese economy picks up speed, so will Mongolian natural resource exports.
The on-going disputes between the government and Rio Tinto related to the OT project have created uncertainties specific to the project and more generally for FDI. FDI enters a country based on long term contract stability. The current dispute based on a multitude of issues, including budget overruns, accusations of tax evasion, wage variances between Mongolian and foreign workers, decision making transparency and how to finance Phase II (estimated at US$5 billion), has forced Rio Tinto to reassess its longer term investment strategy for OT. Foreign investors have followed Rio Tinto’s lead and placed new investments in Mongolia on hold.
Recognizing the negative impact that uncertainty is having on the OT project and the economy, the government is now taking a fast track approach to resolving the situation. It sent the three government board members of OT to Rio Tinto’s HQ in London at the end of September to advance discussions. Initial feedback from the meetings has been positive with resolution now anticipated by year end.
Although the Mongolian economy has taken a significant hit, the economy is showing resilience. The downturn in the mining sector has been partially offset by the growth in the agriculture sector which grew 20.6% in 2012. Also, using funds available from the Chinggis Bond (US$1.5 billion) the government has created a mini-boom in the property development and infrastructure construction sectors. It is providing funding to support 8% mortgages for apartments under 80m2, making new housing for low-medium income families more affordable and improving their standard of living. This initiative is expanding the construction sector and creating new opportunities for construction material suppliers, for both importers and local manufacturers. Chinggis Bond funds are also being used to build essential infrastructure, which is key to developing the mining industry and growing exports.
The overall net effects have been that the 2013 GDP growth forecasts have been revised down by economists to below 10% and the Tugrik continues to be under pressure. However, once the OT disputes are settled and further amendments to the foreign investment and mining laws are ratified by Parliament, the Mongolian economy is expected to achieve GDP growth rates previously forecast by the IFC/World Bank of around 20% per annum.
Business Environment For The Foreign Investor
As a rapidly growing emerging market, Mongolia presents many opportunities for foreign investors. At the same time, there are also many challenges in understanding the local business culture and practices, finding the right partner and appreciating the political and regulatory risks.
In recognition of the need to make Mongolia more FDI friendly, on 3 October 2013 the Great State Khural passed an investment law that ends the application of different rules for domestic and foreign private investors. Mongolia’s new law eliminates earlier rules that were perceived as discriminatory against foreigners and sets stable tax periods. The new investment law will take effect immediately and voids the SEFIL, passed in 2012, which limited foreign investment and ownership in the strategic sectors of mining, banking and communications.
The new law contains tax stabilization measures and provisions (corporate income taxes, VAT and duties) for periods of five to 22 years, based on the size of investment and the location within Mongolia. The new law also contains provisions that will prevent future changes to legislation. To encourage large scale developments, investments of more than US$300 million will be eligible for additional stability conditions. These amendments are intended to provide investors with the confidence and assurance they require. The new law retains the provisions in the SEFIL that apply to foreign government State-Owned Enterprises (SOE). In instances where an SOE aims to hold more than 33% of a company, it will still require government approval.
This is the first of a number of changes to existing laws effecting FDI that we expect to see Parliament pass within the next six months. Some of the expected new laws/amendments will relate to the mining sector – including a redefinition of what is considered to be a “Strategic Deposit” and redefining the “Law with the Long Name” (limiting mining exploration and development of deposits near rivers and forests).
This article can be found at:
Mongolia has a potentially hard time ahead of it on its way to prosperity. However, if the government and people work together to blaze the trail to that prosperity, the likelihood of finding it at the end of their road is very high.
Hawkeye in China
Published by admin on November 22nd, 2013 tagged Uncategorized | Comment now »
Many people in the United States are fascinated with China. I have had a fascination with China for over 35 years. I studied China in high school and college and had the extreme good fortune of being able to make my first of many trips to Beijing in 1994. My fascination with China has culminated with my recent relocation from Idaho, USA to Beijing.
I have found in the past that when I tell my friends and others about my travels to China, the first most common thing they say is, “I have always wanted to go to China!” That statement is almost always followed up with the question, “How difficult is it to get around and do other things when you don’t speak Chinese?”
I sometimes wonder if Chinese citizens returning to China from to their travel to the United States hear similar statements questions from their friends and associates. Given the two very different approaches schools in China and the U.S. are taking in the area of teaching foreign languages, I would have to give the education edge to Chinese students. By virtue of the emphasis Chinese schools and Chinese students are placing on the study of English, I feel Chinese students are much better equipped to interact with Americans than Americans are to interact with their Chinese speaking counterparts.
“What do you call someone who only speaks one language?” “An American.” I have heard this joke many times in my travels and I must admit to having told it myself a time or two. I mention this to emphasize further the differences between Chinese and American school curriculums. China has made the study of English compulsory for students starting in the third year of primary school. Proficiency in English has become integral for Chinese applying for jobs with foreign companies. It is seen as a passport to a better, more prosperous future.
Now contrast the Chinese all out efforts to learn English, with the dearth of students in the U.S. who know how to speak any Chinese, and the scarcity of schools and colleges that even offer the study of Chinese to their students as an option. The sad truth is that when faced with tight, inadequate budgets, foreign language classes are often one of the first things sacrificed to make ends meet. Should there be enough money in a budget to offer a foreign language option or two, the default languages offered are usually Spanish, German or French. Chinese never seems to make the cut.
However, the number of proponents for teaching Chinese in school seems to be growing within educational circles in the U.S. They argue that China’s stature in a growing, interconnected economy makes it ever more important for students to learn Chinese so they will be able to communicate and negotiate better and so that they will be able to be more competitive.
Dissenters to this idea argue that because there are an ever growing number of English speakers in China, the need to teach Chinese in U.S. schools is lessening all the time. While, in my experience, there is some validity to that argument, on the whole, I think students who learn Chinese in U.S. schools will have a definite advantage over their non-Chinese speaking contemporaries who wish to do business in China, or who wish to interact on any level with the people of China.
I would be remiss if I did not mention that there is some dissent in China against compulsory English language lessons. Some detractors argue that English studies take up too much of a pupil’s time, and that only a few of the students learning English will ever get to use it. Others argue that the big emphasis in Chinese schools on teaching English means that the students are not becoming as proficient with their own language as they should be. Students, it is said, are becoming too Americanized and are mixing English words with their pinyin. These sentiments and others are leading some people to call for dropping English as a compulsory course in primary and middle schools.
I feel that compulsory English language courses in China benefit both the students and people of China in many tangible and intangible ways. They lead to greater levels of understanding and interaction and understanding between the China and the English speakers of this ever shrinking world. When my friends and others ask me about how easy or not it is to get around China as a non-Chinese speaker, I tell them about all of the English speakers in China now and that the number of English speakers is growing every day. I tell them about Chinese people of all walks of life, and especially students, asking me if I would please speak with them in English so they can improve their English skills. I am always happy to do this. It makes me feel less and less like a stranger in a strange land.
Hawkeye in China
Published by admin on November 19th, 2013 tagged Uncategorized | Comment now »
Corn is a major staple in the diets of many people world-wide. Now, because it is still recovering from the worst drought in 50 years in the corn producing mid-west region of the United States, the global corn supply is seriously threatened and looks to become even more in peril in the future. Some experts are even saying the world is on the brink of a food catastrophe.
In May of 2012 U.S. farmers were anticipating a record corn crop, and corn importing countries around the world were expecting the price for the corn they need to import to drop. The draught drastically curtailed those expectations. U.S. corn yields were expected to be the lowest in 17 years, and corn prices shot up 60 percent after June 15.
A fairly recent article in Aljazeera (Sept.3, 2012) reported, “According to a report by the World Hunger Bank released this week, global food prices have hit record highs. In July alone, its global food price index increased by 10 percent and the price for corn and soybeans has reached record prices in recent days.”
In another fairly recent article in Aljazeera (Aug. 21, 2102) by Robert Kennedy, the author states in part, “Analysts say crippling drought in the U.S. is likely to trigger unrest in impoverished nations dependent on food imports…When food prices spike and people go hungry, violence soon follows. Riots caused by food shortages similar to those of 2007-2008 in countries like Bangladesh, Haiti, the Philippines among others may be on the horizon, threatening the stability of impoverished nations the rely upon U.S. corn imports.” What does this mean to China?
There was an article in the” Financial Times” on-line publication by Gwen Chen in Beijing entitled, “Chinese Grain Imports Hit Record High”. In this article, Ms. Chen goes into detail about the amount and types of grain China imported in March 2012, and it describes China’s dependency on imported grains. Among other things, her report contains the following information.
“China’s grain imports reached a record high in March, as the world’s most populous country increasingly turns to overseas markets to meet its agricultural needs.”
“Custom data from Beijing revealed that grain imports reached 1.64m tonnes in March 2012, up to six fold from a year earlier and up 50 percent from the previous month.”
“China has to feed a fifth of the world’s population with only 8 percent of the world’s arable land, and does not grow genetically modified grains. As rising incomes and more meat heavy diets boost demand, China’s reliance on imports has slowly increased.”
“China accounts for about 20 percent of the world’s corn consumption and only four percent of global corn trade, but its sudden corn buying has greatly tightened the global market. China’s corn imports in January and February of 2012 totaled 1.26m tonnes, four hundred times more than the same period last year.”
“China’s corn prices are among the highest in the world…”
China’s corn prices are destined to climb higher because the dwindling supply of corn as the bidders in a hungry market vie for as large a share of it as they can secure. How this situation will affect China’s huge population of consumers has yet to be seen.
There are an increasing number of calls from places like the International Food Policy Research Institute in Washington, D.C. for the U.S. to end its biofuel program that uses 40 percent of the U.S. corn output to make fuel. About 4.5 billion bushels (114.3 million metric tons) is planned to be used beginning on September 1. That is almost as much as the combined forecast amount in Argentina, Brazil and the Ukraine. It remains to be seen if the conversion of corn this year into biofuel will be curtailed entirely in the U.S. in light of the looming global food crisis.
There was some rain late in the season in the corn producing mid-west region of the U.S., but sadly it was a matter of too little too late. The damage to the corn had been done so the global community must do what it can to mitigate the looming food crisis. The U.S. can curtail ethanol production and countries including China and India can release their food stockpiles to help their poor cope with rising costs. We will know more about how bad the food crisis may be only after the corn is harvested in 2013, and after global governments do whatever they can to forestall it.
Food and water supplies are becoming critical all over the world, and particularly in China. There isn’t enough water to make it feasible to irrigate marginal farm land. Therefore, China will become increasingly dependent on the rest of the world for its food and water. This is not a position the country wants to be in now, or in the future.
Hawkeye in China
Published by admin on November 18th, 2013 tagged Uncategorized | Comment now »
2013 has been an interesting year for watching developments in China’s courts concerning the ever increasing number of new IPR related cases Chinese judges are hearing and making decisions on. Currently there is a movement to reform Chinese IPR laws in the political wind, and this trend toward reform is making Chinese judges take notice of which way the wind is blowing.
On November 11, 2013, the “China IPR” website posted an article which reviews what they believe to be “8 model IPR cases” for 2013. It then goes on to give a brief summary of these 8 cases. Further, the article presents an analysis of each one of the 8 cases and speculates on what the decisions made by the courts say about which direction the courts will be heading in the future.
Some of the 8 “Model” cases you may already be aware of, some you may not have heard about. In any event, the article posted on the “China IPR” website is certainly worth having a look at. The article is entitled, “IPR Model Cases: Part of the Long Journey towards IPR Laws with Chinese Characteristics.”
Hawkeye in China
Published by admin on November 13th, 2013 tagged Uncategorized | Comment now »
The State Council in China reportedly intends to do away with minimum capital requirements for starting up new companies, reports the “China Daily” newspaper in an article posted on its on-line website October 28, 2013. The article was written by Wei Tian and Yu Ran and it is entitled “Requirements cut for business startups.” The article’s authors report:
“Reform will help people set up their own businesses
China has removed the minimum capital requirements for registering a new company, among other reforms aimed at lowering the threshold for business startups and stimulating the private economy.
The minimum registered capital requirement of 30,000 yuan ($4,900) to start a limited liability company will be removed, as will the 100,000 yuan requirement for an individual company and the 5 million yuan requirement for an incorporated company.
There will also be no more limitations on the proportion and duration of the paid-in capital, and it will be no longer a matter of business registration. Instead, the amount and duration of registered capital will depend on the founder of the company.
The reforms were announced at an executive meeting of the State Council led by Premier Li Keqiang on Friday.
“By widening the market access and establishing a transparent and efficient modern company registration system, we aim to further streamline government administration, create fair competition and support smaller businesses, especially innovative enterprises,” Li said.
The measures will help expand private investment, strengthen the foundation for the economic recovery, as well as create more job opportunities, Li said.
The latest reforms also involve replacing the annual inspection of companies with a reporting system that can be viewed online to increase the transparency of business operations. Requirements for company registration address will also be simplified.
In the meantime, Li called for advancing the building of an integrity system: Enterprises with deceptive practices will be put on a “blacklist” that will be publicly available.
Ju Jinwen, an expert on private economy at the Chinese Academy of Social Sciences, hailed the reform measures as “long-awaited breakthroughs” in company registration.
He said the minimum requirement of registered capital was meant to protect the interest of creditors, but it performed little function as in many cases the registered capital was actually borrowed.
“The reform solves the issue by lowering the threshold but strengthening midlevel supervision. It is in line with many other market-oriented reforms pushed forward by the new leaders,” he said.
“Its ultimate goal is to inspire entrepreneurship among private investors,” Ju said.
From 2006 to 2012, the proportion of private investment as a percentage of total volume in China has increased from 49.8 percent to 61.4 percent.
“The changes made by the State Council in the registration system of enterprises is likely to attract more small and micro-sized enterprises with quite low registered capital, and will contribute to the recovering economy,” said Zhang Beilei, the general manager of Wenzhou Gaotian Shoe Co, which exported nearly 50 percent of its products to regular clients in Japan.
Zhang added that the reform was expected to create fair competition, which would encourage private enterprises to manufacture higher quality products with more innovative technology.
“The lower requirement for enterprises’ registered capital will definitely allow more individuals to launch their companies with less money through a more convenient procedure,” said Zheng Da, the owner of Yuyao Chezhiku automotive supplies in Zhejiang province
A micro-sized enterprise launched in 2011, Zheng’s factory has about 20 workers and monthly sales revenue of more than 200,000 yuan.
Zheng added that more measures would hopefully be issued to help existing private enterprises with tax deductions and lower labor costs.”
These new reforms are aimed at attracting new businesses and at making China a more “friendly” place to own and operate a business. This is definitely a step forward for China.
You may find this article at: http://usa.chinadaily.com.cn/business/2013-10/28/content_17062000.htm
Hawkeye in China
Published by admin on October 31st, 2013 tagged Uncategorized | Comment now »
For the uninitiated, life in China presents certain “little lessons” that one needs to take heed of and act accordingly. The lessons to be learned in China can be encountered in one variation or another in cities all over the world. Every country presents foreigners with its own particular learning curve. Having said that, foreigners coming to China who don’t know the language, and don’t know the culture, are “perfect recruiting targets” for those unscrupulous “teachers” who are eager to “take them to school” in the ways of China.
There is a interesting and quite informative website about people, places and things in China that is operated and maintained by expats who want to make coming to China and living in China a better experience for fellow expats. This site is called, “echinacities.com”. On October 19, 2013, an article written by Susan Gordon entitled, “7 Common Scams in China and How to Avoid Them” was posted on the “echinacities” web site. If you are planning to come to China for business, or maybe just as a tourist, the “educational” nature of the article will certainly help you prepare to pass at least some of the tests that might present themselves to you while you are here. Susan Gordon’s article is reprinted below. Learn your lessons well. There may be a test.
“Although China is relatively safe compared to other countries, there are still dangers. City life is never 100% crime-free – there are pickpockets, unscrupulous shop owners, and dodgy taxi drivers everywhere. Although personal safety is mostly common sense, knowing what to look out for can make a world of difference. Here are some common scams you might encounter in China, and how to stay one step ahead.
The teahouse scam
A lot of people fall for this one when they first arrive in China. It is most common in Beijing and Shanghai, but it also happens in other big cities. A couple of young people will approach you, often asking if they can practice their English. After a brief conversation, they will offer to take you to a teahouse. After the tea ceremony, you’ll be hit with a bill running to hundreds (even thousands) of RMB. Your new friends will have vanished; or they’ll pay part of the bill – money they’ll get back as soon as you leave. Even if you ask to see the menu to verify the prices, the staff will bring you a different one with ridiculously inflated prices. No cash? The kind manager will escort you to the ATM. Refuse? They’ll get nasty. Your only choice is to stump up or run, if you dare.
How to avoid: Either refuse to talk to anyone in the street, or, if you want to be friendly, suggest a reputable teahouse, or a chain like Coffee Bean or Starbucks. If they refuse, it is likely to be a scam.
2) The art scam
This is similar to the tea scam, but the students claim to be art majors, and offer to take you to their gallery. Once there, you’ll be strong-armed into buying overpriced, worthless art.
How to avoid: Don’t take the bait. Simple.
Obvious, but still a danger. They operate on public transport, busy streets, restaurants, and often work in gangs, so by the time you notice the fingers slipping into your bag or pocket, your wallet will be on the next street.
How to avoid: Street thieves can be incredibly sneaky, so be ultra careful at all times. Carry your important documents and most of your money in a money belt, make copies of your documents, don’t keep all your cash in one place – divide it between pockets or belt and wallet.
4) Airport taxis
You know the feeling: you land at Honqiao or Pudong, glimpse the taxi queue snaking into the distance, and decide to hop into an unlicensed cab instead of waiting. After all, you just want to get home, right? Think again. Best case scenario, you get ripped off as there’s no meter. Even if your Mandarin is great, there’s no arguing with a crooked taxi driver. Worst case scenario, you’re driven to the back of beyond and robbed of all your possessions.
How to avoid: Don’t use unauthorized cabs. Even if you get into a licensed one and feel that the driver is taking you for a ride, literally, write down his identification number.
5) The card swap
If you pay your taxi fare with a transport card, sneaky taxi drivers sometimes swap your card for an empty one without you noticing.
How to avoid: Mark your card with permanent ink, or invest in one of those card-sized stickers that teenage girls like to use.
6) Dodgy tour guides
A trip to the Great Wall? A panda tour? A guided walk along the Bund? These are just some of the ruses that con artists use to get tourists to part with cash. Sure, they’ll take you to the Wall/sanctuary/Bund, but once you get there you’ll be asked to pay extra fees. You’ll also most probably be taken to souvenir shops along the way.
How to avoid: Book your tour with reputable companies, not street touts – however trustworthy they might appear.
7) The Traditional Medicine Scam
You’ll be invited to tour a traditional medicine clinic. A physician will examine you. Lo and behold, you’ll be diagnosed with some ailment or other, and – quelle surprise! – the clinic has just the medicine to cure you. Obviously, it costs several thousand RMB…
How to avoid: Simple – don’t buy. Or don’t get examined.”
Please know that China is a great place and the Chinese people are very friendly, great hosts. I have been coming to China since 1994 (I now live in Beijing) and so far I have fortunately been lucky enough, and cautious enough, over the years to pass China’s tests. However, most of my “luck” has been largely due to the teachings of my friends and work colleagues who have so generously taken the time, and made the effort to “tutor” me in the ways of China. So I am “paying forward” what I and others have learned about surviving China to all of you who are following in our footsteps
The article above can be found at: http://www.echinacities.com/news/68083
Hawkeye in China
Published by admin on October 25th, 2013 tagged Uncategorized | Comment now »
There was a very informative article posted on the on-line newsletter “Azila” website on October 18, 2013. The article is entitled, “Foreign Brands: Here’s A Better Strategy for Beating Chinese Counterfeiters in China”. The article was written by Paolo Becancini and it presents detailed insight into the ways the massive on-line Taobao shopping site is working with foreign companies to combat counterfeiting in China by preventing the counterfeit goods from being offered for sale on the Taobao site. This article by Mr. Becancini is reprinted below.
“Taobao is a Chinese-language website for online shopping founded by Alibaba Group in 2003 which has become, by far, the largest e-commerce platform in the world, and thus a very appetizing market for counterfeits. Similar to eBay, it has than 60 million visitors daily, sells 48,000 goods each minute and had a C2C turnover of over $163 billion in 2012. As a consequence, it has become the object of attack for foreign brand owners who are fighting an ongoing battle with counterfeiters and who have invested heavily in attempts to curb the illegal transactions of counterfeits on Taobao.
Taobao shops closed daily
Hundreds of Taobao shops handling counterfeit goods are closed daily, but it is a losing game. Each time one is shut down, more pop up to take over the business. The perception among IP owners is that monitoring Taobao and shutting down its counterfeit shops is a waste of resources. Furthermore, it is difficult for a brand owner to actually assess if any damage at all has been done to an infringer by shutting down its Taobao window. Frustration is the inevitable outcome. It begs the question as to whether the action IP owners take with Taobao are really suitable in the long term to achieve their IP-management goals.
Is the problem with Taobao?
The frustration of IP owners towards Taobao leads often to a misperception. Taobao is accused of illegal handling of and intentionally profiting from the counterfeit business. In reality Taobao is very committed to IP protection. The company has internal regulations and ethical guidelines which are in place to monitor, prevent and remove infringements. Furthermore, the vast majority of products on Taobao are original and brand new and are offered for sale at a fixed price. Nonetheless, in the field of brand protection, Taobao evokes a negative reaction. The reality is that few IP owners could say that Taobao is not receptive to their concerns. The proof is that Taobao is willing and ready to shut down e-stores as soon as an IP owner provides objective evidence of the infringement. Indeed, Taobao launched an IPR protection online system in 2011. As the right holder, brand owners can register all their trademarks, patents and copyrights there. After being checked by Taobao, the right owner can file complaints against suspected infringing links to remove the illegal pages. Also, when a user/owner receives a certain amount of complaints, he will be forced out of Taobao and will not be able to open e-shops in Taobao again. As Ma Yun, the former CEO of Alibaba Group, said, the offline counterfeiters are worse than those on Taobao. Understanding and using Taobao is a lesson each rights owner must learn to improve their company’s brand protection strategy in China.
Closure is not a deterrent
When it comes to counterfeiters, Taobao mostly hosts traders rather than factories. Shutting down web-shops in Taobao only impacts traders temporarily as manufacturers and masterminds of counterfeit rings use in fact many distribution channels. Secondly, a new link in Taobao can be quickly re-established by using a new account and contacts. In practice, shutting down e-shops in Taobao may – at most – lead to a very temporary slowdown of infringing activities, but will neither be either a deterrent for infringers to stop counterfeiting nor a direct hit at the core structure of the counterfeit organization. If we rank trademark enforcement activities based on the deterrent value they have, for instance, on an infringing ring, shutting down a trader shop in Taobao does not rank among the first and most incisive actions. If the success and effectiveness of an action in Taobao is not realistically measured against these factors, it is evident that a brand owner will be easily and quickly frustrated.
Considering enforcement as an isolated enforcement activity will lead to frustration, misperceptions and ultimately to an ineffective enforcement and improper use of the possibilities offered by Taobao in the fight against counterfeiting. Based on our experience, Taobao should not be seen firstly as an enforcement target, but rather as an investigative tool. The availability of Taobao to cooperate should not be used only to shut down e-shops, but to collect more information. Taobao, in our opinion, gives an IP owner a source of information on the infringement trends of his brands. It can provide important information about counterfeiting, distribution channel control, and even act as a test for checking the popularity of certain brands over others, thus helping manage supply chains and marketing.
If Taobao is seen more as an investigative tool and a source of information rather than as an infringer itself, new brand-protection strategies can be planned to exploit this tool. Information collected on Taobao could be, for example, the perfect start to investigations aimed at finding not only the trader behind the e-shop, but also the factories and syndicate behind the trader. When, for instance, traders handling high volumes of fakes are found in Taobao, the IP holder should refrain from asking Taobao to delete that e-shop. Rather, he should subject the target to further investigation and IPR enforcement by raids or a civil lawsuit. By routinely shutting down the page (and this is what normally happens!), the brand owner deprives himself of the chance to hit a larger counterfeiting organization. In a comprehensive brand-protection management strategy, such action would be an obvious mistake.
That IPR enforcement in Taobao can be successful is also shown in some recent cases. In March 2013, the Chinese police in Nanjing, attracted by several complains by consumers, investigated a shop on Taobao selling a certain NUTRILITE protein powder. Afterwards, the brand owner AMWAY purchased and tested some samples, and it was confirmed that the protein powder was fake. The police raided the premises and during the police action, more than 170,000 cans of fake AMWAY products were seized with a value of more than RMB 140 million (about $22 million). Also in March 2013, the Economic Investigation Department of the Qingpu District Public Security Branch of Shanghai City seized more than 20,000 cosmetics of different western brands in a private house that were valued at more than RMB 10 million (about $1.6 million). Eight suspects were arrested.
The examples above are a simple demonstration of our recommended approach to infringement in Taobao. Brand owners in these cases have used Taobao not as the enforcement target but as a source of information and an investigative starting point. A change of perspective can end the frustration of the current most-common strategy of merely shutting down trading e-shops in Taobao.”
The content of the article above is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
Counterfeiting, and the sale of counterfeit goods, cost legitimate manufacturers millions of dollars each year. As suggested above, western manufactures will need to take ever more innovative approaches to combating the counterfeiters.
The article above may be found on-line at: http://www.alizila.com/foreign-brands-heres-better-strategy-beating-chinese-counterfeiters
Hawkeye in China