The 10th edition of the International (Nice) Classification of Goods and Services
The 10th edition of the International (Nice) Classification of Goods and Services for the purposes of the registration of trade marks comes into effect on 1 January 2012. China Trademark Office has announced the adoption of the 10th edition of Nice Classification. Lehman, Lee & Xu’s Trademark Attorneys now are following up the new edition in our daily work as from Jan. 1, 2012.
LEHMAN, LEE & XU’s trademark services include a holistic approach to problem solving. As a full-service firm, we counsel our clients with their entire business strategies in mind, bringing in team members who specialize in taxation, administrative regulation, asset valuation or other areas as needed. We handle trademarks from “cradle to grave” and cover everything from registration and initial strategies through enforcement and assignments/transfers. We assist our clients in the selection and clearance of appropriate trademarks, prosecution of trademark applications in China and abroad and maintaining and enforcing our clients’ trademark portfolios. All of our trademark attorneys are licensed with the China Trademark Office. Our attorneys handle numerous proceedings, such as non-use cancellations, revocations, oppositions, re-examinations, pledges, and well-known trademark petitions before the China Trademark Office and other regulatory bodies as well as enforcing trademark, trade dress, unfair competition and related claims in judicial, quasi-judicial and administrative actions. Our trademark attorneys are also involved in all aspects of transactional trademark work, including negotiating and drafting licensing, distribution and franchise agreements. We regularly advise and counsel our clients in the acquisition and sale of trademark portfolios and individual brands, including as part of larger merger transactions. Our trademark clients range from small international trading companies to large multi-national corporations.
Some classifications have changed. For example, dietary and nutritional supplements are now classified in class 5 (previously classes 29 and 30); nappies will now fall in class 5 (previously 16 and 25); and game consoles of all types now fall in class 28 (previously “games (apparatus for —) adapted for use with an external display screen or monitor” were in class 9).
Published by cyao on January 18th, 2012 tagged Uncategorized | Comment now »
LEHMAN, LEE & XU announced as China Intellectual Property Law Firm of the Year 2012 by Lawyers World Global Awards
LEHMAN, LEE & XU announced as China Intellectual Property Law Firm of the Year 2012 by Lawyers World Global Awards. Beijing, China, January 12, 2012 – Global Leading Intellectual Property Law Firms campaign, is created via a thorough, Global poll of the readership, Lawyers World asks the voting readers to put forward nominations for those firms that are, in their opinion “top-ranked” within the intellectual property field.
The votes received and internally assessed by Lawyers World Global Awards 2012’s Editors, and externally assessed by a panel of judges, who have been chosen for their experience and knowledge of the field of intellectual property, provide a comprehensive list of those firms that are truly “top-ranked” and in essence set the benchmark for all others to follow.
During the judging process a number of factors are considered. The 2012 voting readers are asked to identify those firms that are noted for having a high degree of ability in complex situations, those that continually innovate, of course the level of service is of great importance as is overall value for money, in what is a tough global economy.
Lawyers World Global Awards announced LEHMAN, LEE & XU as China Intellectual Property Law Firm of the Year 2012.
Published by cyao on January 12th, 2012 tagged Uncategorized | Comment now »
Mr. Edward Lehman has been nominated as the Leading China Legal Expert for Franchise Law
Managing Director, Edward Lehman, nominated as China’s leading expert in China Franchise Law by leading media outlet. Mr Lehman is a 25 year resident of mainland China. Lehman is a former research fellow at the China Academy of Social Sciences (where he worked with key decision makers who drafted the China franchise law and helped with subsequent changes) so he is uniquely qualified as a China Franchise Law Expert. He has worked with IFA over the years and foreign legal counsel to China Chain store and Franchise Association and the regulator China Ministry of Civil Affairs. Mr Lehman, was the first legal expert to translate the Chinese franchise laws to English and is longest serving managing director of any law firm in the PRC (20 years with LEHMAN, LEE & XU). The law firm is proud to announce Mr Lehman has been once again, nominated for the position as the leading China legal expert for Franchise Law in China by Global Law Experts Media 2012.
Published by cyao on January 11th, 2012 tagged Uncategorized | Comment now »
Dealmakers of 2012, China Law Firm
The DealMakers Global Awards 2012 has selected LEHMAN, LEE & XU China by a vote of the magazine’s global readership with a comprehensive guide to those firms that are noted for demonstrating a consistently high level of ability, within those Countries that the monthly publication reaches, whilst ensuring they are kept well informed as to who the firms of note are, thus ensuring those Award winning firms receive appropriate recognition and acknowledgment.
Recognizing the experience and skills that many of the developed nations have, we know how important it is to be recognized as a leader in China, the country with the fastest growing economy in the world and a country that has undergone the greatest economic transformation of all time, therefore being singled out as the “go to firm” for Dealmakers, LEHMAN, LEE & XU has been consistently been referred to by our readership of Corporate General Counsel worldwide, as proactive legal advisers, that do more than advise, but actually make deals happen bridging the cultural, business, and language gap which sometimes occurs in foreign and Chinese related deals .The DealMakers Global Awards 2012 recognized a select number of leading professional firms, across the globe, for their individual areas of specialization, within their geographical location. LEHMAN, LEE & XU is pleased to be the only firm recognized for China. The DealMakers Global Awards 2012 are presented across all geographical locations that the Monthly Magazine penetrates. LEHMAN, LEE & XU China is pleased to be recognized by the readership as the magazine salutes the organizations & advisers that have performed to exceptional levels during the most difficult period that the global economy has experienced for decades. The process of LEHMAN, LEE & XU’s recognition by it peers was through, a total of 81,500 electronic voting forms were issued. By close of business Wednesday 04th January 2012, votes received totaled 23,635, demonstrating a 29% response rate, selecting LEHMAN, LEE & XU China as the “China Dealmakers of the Year 2012″.
The poll represents who the readership believes are the leading professional firms, within the various areas of specialization, across the various geographical regions. Edward Lehman, who is China’s longest serving managing director of any law firm in the country, and a 25 year resident of mainland China (Beijing and Shanghai) commented, “as the firm celebrates its 20th year in mainland China, we are appreciative to all our peers and corporate counsel who selected LEHMAN, LEE & XU as the China Dealmakers Law firm 2012, the firm continues to go from strength, to strength in the world’s’ most dynamic economy, China”.
Published by cyao on January 8th, 2012 tagged Uncategorized | Comment now »
FAQs on the Supreme People’s Court issued the first “guiding cases”
Q: What is the status of the first “guiding cases”?
A: The guiding cases just ushered in by the SPC is different from the decisions published by the SPC or any of its functional divisions before mainly in that these decisions are actually officially recognized as an authority of law (or source of law) which judges can rely on when interpreting laws (although it’s also very possible that some judges simply rely on these decisions without carefully analyzing their relationship with the existing relevant statutes, as already indicated by the way the first guiding cases are presented by the SPC, as I have mentioned in my very first post.) and are allowed to cite them in the decisions, although only as grounds of reasoning. Sure, non-guiding cases can also be taken into consideration by judges when deciding cases and accordingly have some effect as a source of law, but if not disclosed, such effect is equal to nothing as judges cannot be held accountable for such consideration and such cases cannot obtain a formal authority and be consciously interwoven into the evolving texture of law. When the decisions of the court, especially those really enriching the existing legal system, are not interwoven into the existing law, they can be ignored at will and get lost with the time passing and the law-making process is monopolized and dominated by the legislature or the government or the party. Such artificially made laws cannot be satisfactory and there would be no hope for the judiciary to raise its importance in the government structure, if it cannot obtain sufficient power in shaping the law. The current practice of judicial interpretation in China is a distorted mechanism of judicial law-making, which cannot legitimately, efficiently and sustainably strengthen the position of the Chinese judiciary. Although the guiding case mechanism is cumbersome and defective, and far from efficient at this moment, it’s the first step toward the right direction and can provide an important impetus and chance for the Chinese judiciary to practice working with precedents under its long tradition of written law, or I would rather say, legal positivism, which I would further talk about. And I believe with more experience in this regard accumulated, the defects of the current guiding case mechanism will be more and more clearly exposed and hopefully then a truly reasonable mechanism of judicial law-making can be established in China. This might also provide preconditions for the solution of many other problems in China’s political and legal structure.
Q: Is the conduct of the first “guiding cases” a kind of making law?
A: In China, it’s actually a manifestation of the prevailing existence of legal positivism (Gesetzespositivismus) in daily judicial practice, and one with roots not only in the special political reality of China, but also in the intellectual ignorance (and hence arbitrary and artificial denial) of the inherent and undeniable rule-forming capacity of the judicial process. According to the Constitution, the SPC is not mandated with the power to interpret the law, which is mandated to the Standing Committee of the NPC. When the NPC has delegated the power to interpret the law in judicial process to the SPC, the SPC has since used this power by issuing statute-like judicial interpretations. Both indicate an ignorance of the undeniable power of the individual judges and courts to interpret the law when deciding cases (of course both have their political and historical backgrounds. However, I would argue that no arguments in terms of political or historical reality can justify intentional denial of predetermined objectiveness, or in German terminology, Natur der Sache).
As it’s still a deeply entrenched concept in China that judges shall not make law, it’s required that only officially specified authorities may be applied as grounds of decision, hence the string citation of statute provisions (the disclosure of applied judicial interpretations has been possible only after the end of the 1980s) in the “decision” part of each Chinese court decision. However, the real needs encountered in daily judicial process require the judges to take other elements into consideration, including constitutional provisions, customs, social morals, trade usage, etc. And now the guiding cases are becoming a new entry. I agree with Mike that the reasoning part could provide important leeway for the court to stuff the general provisions of codes and statutes with new ideas, thus breaking the rigid legal positivism to some degree (even the development of a constitutional jurisprudence is imaginable, as Mike opined.). However, this must occur in a disciplined and structured way, especially a way that can be examined and discussed, thus guaranteeing a necessary balance between flexibility, capacity of growth and stability and predictability. This is possible in, say, Germany due to, inter alia, the long tradition of Rechtsdogmatik. But as I have analyzed in my first post, such relationship between the new elements introduced by the guiding cases and the relevant provisions of law is at most only very vaguely understood by the SPC. It’s not a matter of coincidence that in not rare decisions of Chinese courts the reader would be baffled to find that the cited provisions in the decision part are not mentioned in the reasoning part at all and appear only very abruptly in the end of the decision. Using Don’s way of description, the reality is often that, the court may name A, B and C in the reasoning part, but then naming D and E as the grounds of its decision. It would be ok if in the reasoning part the court convincingly explains that A, B and C are the right interpretation of D and E, and one does find such good court decisions in China, but they are rare.
Published by cyao on January 5th, 2012 tagged Uncategorized | Comment now »
Lehman, Lee & Xu awarded as a Best China Patent Law Firm 2012
The Lawyers World Global Awards 2012 recognize a select number of leading professional firms, across the globe, for their individual areas of specialization, within their geographical location.
Lehman, Lee & Xu was selected as a Lawyers World Global Awards Winner 2012 – in the category of Patent law firm of the year.
According to the Lawyers World magazine, “98,850 electronic voting forms were issued.” By close of business Friday 23rd December 2011, The Lawyers World Global Awards 2012 votes received totaled 25,701, demonstrating a 26% response rate. The poll represents who the readership believes are the leading professional firms, within the various areas of specialization, across the various geographical regions.
Managing Director of Lehman, Lee & Xu Mr. Edward Lehman commented: “While resident in China for 25 challenging years we are pleased to be recognized by our legal peers worldwide as our firm, one of only eight, that enters the 20th year of existence in mainland China. I am honored to have served as the longest managing director of any firm in China for these past 20 years, and that combined with my five years work as an associate with an international ‘big law firm’ in China (in Shanghai commencing 1987) and as the first foreigner to work in a Chinese-state- owned law firm (in Shanghai 1989), I have been grateful to have been a guest in China and a witness to the greatest economic transformation in the history of the world”
Lehman, Lee & Xu is a prominent Chinese corporate law firm and trademark and patent agency with offices in Beijing, Shanghai, Shenzhen, Hong Kong, Macau, and Mongolia. The firm has been recognized as one of the top trademark firms in China by several intellectual property magazines and is managed by Mr. Edward Lehman, a leading expert on corporate law with 20 years of practice experience in Mainland China.
To learn more about us, please visit our website at www.lehmanlaw.com.
Published by cyao on January 2nd, 2012 tagged Uncategorized | Comment now »
FAQs on Filing a Request for PPH to the SIPO
Q: Must a request for PPH be filed based on claims of an application granted by the JPO?
A: It is possible to file a PPH request based on national work products from the JPO or based on the PCT international work products from the JPO.
In the situation where the national work products from the JPO are used, at least one corresponding application must exist in the JPO that has one or more claims that are determined to be patentable/ allowable by the JPO. Claims that are “determined to be allowable/ patentable” means that the JPO examiner explicitly identified the claims to be allowable/patentable in the latest office action, even if the application is not granted for patent yet.
In the situation where PCT international work products from the JPO are used, it is required that the latest work product in the international phase of a PCT application corresponding to the CN application, namely the Written Opinion of International Search Authority (WO/ISA), the Written Opinion of International Preliminary Examination Authority (WO/IPEA) or the International Preliminary Examination Report (IPER), indicates at least one claim as patentable/allowable (from the aspect of novelty, inventive steps and industrial applicability).
The applicant cannot file a request under PCT-PPH on the basis of an International Search Report (ISR) only.
Q: What are the opportunities for filing a PPH request?
A: To file a PPH request, the CN application shall meet the following requirements:
(1)The CN application must have been published before, or when, filing a PPH request.
(2)The CN application must have entered into the substantive examination stage.
The applicant may file a PPH request simultaneously with the Request for Substantive Examination.
(3)The SIPO has not begun examination of the application at the time of filing a PPH request, namely, no office action has been issued yet.
The applicant may file a PPH request for a CN application satisfying the aforesaid requirements simultaneously with the Request for Substantive Examination or file it as soon as possible after the receipt of a Notification of Entering into Substantive Examination for Patent Application for Invention.
Q: What are the documents to be submitted and detailed requirements on these documents?
A: (1)Request Form for Participation in the Patent Prosecution Highway (PPH) Pilot Program
(2)Copies of all office actions that were issued for the corresponding application by the JPO, and Chinese or English translations of them.
Under the PCT-PPH, it is necessary to submit a copy of the latest international work product that indicates the claims to be patentable/ allowable and its Chinese or English translation.
Please be kindly advised that the translations shall be in a unified language. In other words, in a situation where plural office actions/ PCT international work products are submitted, the applicant may select to translate them all into either Chinese or English, rather than Chinese and English in combination.
(3)Copies of all claims determined to be patentable/allowable by the JPO, and translations of them.
Please note that the translations mentioned in the above items 3-(2) and 3-(3) need not to be precise but to be understandable to the examiner.
(4)Copies of references cited in the work products of the corresponding application
Documents that are only referred to as references and consequently do not consist of the reasons for refusal do not have to be submitted. If the references are patent documents, the applicant does not have to submit them.
Non-patent literature must always be submitted.
Translations of the references are unnecessary.
(5)Claim correspondence table, which indicates how all claims in the CN application sufficiently correspond to the patentable/allowable claims.
Q: Is it possible to make correction to an application in a request for PPH?
A: There is no opportunity for the applicant to make initiative correction to an application at the time of filing a PPH request.
In instances where the request does not meet all the requirements, the applicant will be notified and the defects in the request will be identified. The applicant may be given a one-time opportunity to correct certain specified defects. The defects are generally limited to the following two cases:
(1)the translation is not understandable; and
(2)the SIPO itself cannot obtain some cited references.
If the submitted correction still does not meet all the requirements, the applicant will be notified and may be given a one-time opportunity to resubmit the request. If the resubmitted request is still not approved, the application will await action in its regular turn.
Published by cyao on December 26th, 2011 tagged Uncategorized | Comment now »
FAQs on Letter of Consent in the Trademark Registration in China
Question 1: Whether can the Letter of Consent be accepted in China?
Answer 1: When a trademark application is refused by citing similar prior trademarks in China, the applicant may first file a review before the TRAB to keep the applied trademark application pending. At the same time, we suggest trying to negotiate with the owner of the cited mark to sign a Letter of Consent.
Although the Letter of Consent has not been formally admitted in China, it can be accepted in the examination practice and a number of refused trademarks are approved for registration after submitting a Letter of Consent signed by the owner of the cited mark. Therefore, if the Letter of Consent can be successfully signed, it may be helpful to convince the review examiner that the owner of the cited mark agrees to the use and registration of the applied mark and the success rate of the review will be enhanced.
Question 2: What is the requirement for the Letter of Consent?
Answer 2: As the negotiation with the owner of the cited marks may take some time, the Letter of Consent is usually submitted within 3 months’ period for submitting supplementary evidence after filing the review.
As the TRAB is now strict in examining the Letter of Consent, it requires the Letter of Consent to be notarized and legalized in the Chinese consulate if the owner of cited mark is a foreign company. If the owner of the cited mark is a Chinese company, it should be notarized.
Question 3: What are the disadvantages of a Letter of Consent?
Answer 3: Not all the refused trademarks can be approved by submitting a Letter of Consent. Whether the Letter of Consent can be accepted will depend on the opinion of the examiner. In the examination procedure, if the applied mark and the cited mark are very similar, the review examiner may possibly not approve its registration even if a Letter of Consent is submitted.
As the owner of the cited mark is usually not directly related to the applicant, it may be difficult to reach the owner of the cited mark. The owner of the cited mark may usually not actively agree to sign a Letter of Consent but may claim some compensation for signing such a document.
Published by cyao on December 26th, 2011 tagged Uncategorized | Comment now »
FAQs on China Expands Yuan Internationalization Efforts with RQFII Pilot Program
Q: What is the RQFII Pilot Program?
A: China has launched a pilot program under the “Measures on the Pilot Program for Asset Management and Securities Companies to Qualify as RMB Qualified Foreign Institutional Investors” that allows Chinese yuan raised in Hong Kong by Hong Kong subsidiaries of Chinese domestic fund management companies and securities companies to be invested in China’s domestic securities markets. This pilot program was announced jointly by the Chinese Securities Regulatory Commission (“CSRC”), the People’s Bank of China (“PBOC”), and the State Administration of Foreign Exchange (“SAFE”) on Dec. 16, 2011, and became effective on the same date. Under the pilot program, the initial investment quota is RMB 20 billion (USD 3.1 billion), 80 percent of which is required to be invested in fixed-income securities, leaving 20 percent available for the equity markets.
This program represents another step for China to achieve its long-term goal to increase the attractiveness of the yuan as an international currency. It comes at a time when foreign exchange is reportedly flowing out of mainland China, and it may help to offset recent capital outflows and to ease tightening liquidity in mainland stock markets. While the program’s effect is expected to be limited given the small size of the new quota, it represents yet another move to liberalize China’s restricted capital markets.
Q: Under the guidelines, an applicant needs to meet what kind of qualifications for approval as an RMB Qualified Foreign Institutional Investor (“RQFII”)?
A: 1) The applicant shall have been approved by the Hong Kong Securities and Futures Commission to conduct an asset management business and shall maintain its asset management business in sound financial and credit status;
2) The applicant shall have an effective corporate governance structure and internal control system, and its employees shall satisfy the requirements of licensed individuals in Hong Kong;
3) The applicant and its parent company in mainland China shall conduct business in accordance with the relevant regulations and shall not have been assessed of any substantial penalties by its local regulators over the three years prior to application;
4) The applicant’s parent company in mainland China shall have the qualification to conduct a securities asset management business; and
5) The applicant shall satisfy other criteria‚ as stipulated by the CSRC‚ based on prudent regulatory principles.
The applicant must first apply to the CSRC for a Securities Investment License. The CSRC will, within 60 days from the date when the full set of application documents is received, determine whether to grant approval. After obtaining a Securities Investment License, the applicant must apply to SAFE for an investment quota. SAFE shall, within 60 days from the date when the full set of application documents is received, determine whether to grant the requested quota.
Published by cyao on December 22nd, 2011 tagged Uncategorized | Comment now »
FAQs on the examination that China has been altered by its entry into the WTO ten years ago
Q: What is the economy aspect of China during the time after entry the WTO?
A: THE World Trade Organisation (WTO), like many clubs, denies patrons the right of automatic readmission. Having quit the organisation’s predecessor shortly after the Communist revolution of 1949, China had to wait 15 long years to gain entry after reapplying in the 1980s. The doors finally opened on December 11th 2001, ten years ago this week.
The price of re-entry was as steep as the wait was long. China had to relax over 7,000 tariffs, quotas and other trade barriers. Some feared that foreign competition would uproot farmers and upend rusty state-owned enterprises (SOEs), as to some extent it did. But China, overall, has enjoyed one of the best decades in global economic history. Its dollar GDP has quadrupled, its exports almost quintupled.
Many foreigners also prospered. American foreign direct investment reaps returns of 13.5% in China, compared with 9.7% worldwide, according to K.C. Fung of the University of California, Santa Cruz. China imposes lower tariffs on average than Brazil or India. The gap between what it can charge, under WTO rules, and what it does charge is also unusually small. So unlike its peers, China could not raise tariffs much even if it wanted to (see chart).
Yet in America, China’s single biggest trading partner, sentiment towards the country has turned starkly negative. In a recent poll, 61% of Americans said that China’s recent economic expansion had been bad for America; just 15% thought it had been good. This partly reflects China’s controversial currency regime. By keeping the exchange rate down, China’s critics allege, it has gained a substitute for the mercantilist measures it gave up to join the WTO.
Foreign frustration is partly a sign of China’s success. As its economy has grown and matured, the stakes have risen. Foreign firms lament losing trade battles they might not bother to wage in a less lucrative market. They also face competition from local upstarts in markets where no such rivals previously existed.
Electronic payments are one example. China’s first ever payment card was issued in 1986 by MasterCard. Foreign brands remained dominant at the time of China’s WTO entry. But shortly afterwards, China’s central bank established a domestic competitor, China UnionPay, and gave it a de facto monopoly over the handling of local-currency payments between merchants and banks. This setback might have been easier to take for foreign companies had the market not since grown tenfold, to $1.6 trillion, according to The Nilson Report, an industry newsletter.
China’s economy has evolved faster than anyone hoped. But its economic philosophy has not. Long Yongtu, who helped China win admission to the WTO, recently said that China is now moving further away from the organisation’s principles. To modernise its economy, it has remained wedded to industrial policies, state-owned enterprises, and a “techno-nationalism” that protects and promotes home-grown technologies.
Many foreign companies feel they must compete not with Chinese firms but with the Chinese state. Between them, China’s central and local governments own over 100,000 companies and implicitly favour many more. Thanks to the WTO, foreign firms are no longer required to hand over technology in exchange for entry to China’s market. But many still feel an informal pressure to do so. China is also keen to promote its own firms by enforcing its own technological standards, such as for 3G mobile phones.
Many of these interventions violate the spirit, if not always the letter of WTO rules. In response, America often pushes back bilaterally rather than in Geneva, according to a former American trade negotiator. This is partly because companies worry they will face retribution from China’s government if they provide evidence against it in a trade case. It is also because much of what China does falls into a grey area that is not easy for the WTO to police.
China, on the other hand, is growing more comfortable with the WTO machinery. In its early years as a member, it shied away from confrontation, points out Henry Gao of Singapore Management University. In 2006, for example, America threatened to file a complaint over China’s duties on kraft linerboard. China lifted the duties the next working day. But now the Chinese have learned the ropes, they have also become more proactive. “Now they defend themselves,” says Nicholas Lardy of the Peterson Institute, a Washington think-tank. “They initiate cases. And when they lose, they comply.”
In some cases the discrimination is no worse than before, it is simply more visible. As part of its WTO agreement, China now circulates draft laws and regulations for 30 days to collect comments. That has made it easier for foreigners to spot foul play. America recently complained that China had failed to notify the WTO of nearly 200 subsidy programmes, such as those supporting green-energy technology. It knew this in part because China, following its newly transparent practice, had disclosed many such programmes online, the former negotiator said: “Similar policy announcements were neibu (for limited distribution) in the past.”
China’s trade policies may look a little uglier than WTO members had hoped when they opened the club’s doors ten years ago. But that is partly because the lights have been turned on.
Q: What is the politics aspect of China during the time after entry the WTO?
A: WHEN trying to persuade Congress in 2000 that China should be let into the World Trade Organisation (WTO), America’s then president, Bill Clinton, knew how to win over the sceptics. China’s admission, he said, was likely to have “a profound impact on human rights and political liberty”. A decade on, China’s disappointed liberals no longer suggest that freer trade will speed political reform.
China’s media have been trumpeting the tenth anniversary on December 11th of the country’s WTO accession. In China as much as in America, the event was seen as of far greater importance than a mere pledge by China to reduce barriers to its markets (moves towards which had long been under way). For both countries it was a crucial part of restoring calm to a relationship that had been marred by annual fights in Congress over whether to keep granting China most-favoured-nation trading status (as enjoyed by most of America’s other trading partners). Mr Clinton’s remarks preceded bitterly contested votes in Congress in 2000 that ended the annual renewal process and ensured America would share any benefits from the market-opening measures pledged by China on entering the WTO.
Chinese officials did not share Mr Clinton’s belief in what he called the “quite extraordinary” change that the WTO would bring about in China, politically as well as economically. Such views were bolstered in the West by supportive comments from some Chinese dissidents. (“Before, the sky was black; now it is light. This can be a new beginning,” Mr Clinton quoted one of them, Ren Wanding, as saying.)
But even the man seen by many in the West as China’s arch (economic) reformer, the then prime minister Zhu Rongji, had no truck with such views. A recent four-volume set of Mr Zhu’s speeches, including many not previously published, shows him to have shared hardliners’ concerns about perceived Western efforts to undermine Communist Party rule in China. “Western hostile forces are continuing to promote their strategy of Westernising and breaking up our country,” he told provincial officials in one now-declassified speech, four months after China had joined the WTO. He accused such people of conducting “infiltration and sabotage” in an effort to foment instability, pointing to large-scale protests early in 2002 by workers in state-owned enterprises (independent observers detected little if any sign of foreign involvement).
Mr Zhu’s reformist zeal in the economic realm helped to foster the impression of a country willing to take considerable political risks in order to create a more market-driven economy. The then party chief, Jiang Zemin, was also pushing through a controversial revision to the party’s constitution to allow owners of private businesses to become members. But high hopes among some Chinese liberals faded as the decade wore on.
Cao Siyuan, who heads an independent think-tank in Beijing, says he and like-minded intellectuals were “over-optimistic” about the ability of the WTO to promote further change, such as the development of a robust and independent legal system. The last decade has seen huge social changes, but these have been a legacy mainly of pre-WTO membership reforms, such as the privatisation of housing and the loosening of controls on internal migration.
And with the Communist Party again facing a big leadership shuffle next year, few believe that long-neglected political reforms will be revived any time soon. Mr Cao has recently published a call for a “division of powers” within the party as a step towards making China more democratic. He claims many in the party support such a notion, but do not dare say so openly. Mr Cao says police stopped him from leaving his home during the visit to Beijing in August by America’s vice-president, Joseph Biden.
In his speech in 2000, Mr Clinton said that WTO membership would accelerate the shrinkage of the state-owned sector which had been “a big source of the Communist Party’s power”. This, he said, would lead to “profound change”. Many liberals complain, however, that remaining state firms not only still control the commanding heights of the economy but are in some cases stepping up their resistance to encroachment by the private sector. In recent years officials have increased their efforts to ensure that party cells are set up in private firms. Several local governments have started requiring private companies to contribute about 0.5% of their payrolls to sponsor party activities on their premises.
Such was the seeming status symbol of WTO membership a decade ago that few in China openly criticised the decision. A Beijing academic, Han Deqiang, was a rare exception. His book, “Collision: the Globalisation Trap and China’s Real Choice”, gave warning of an American plot to use the WTO to “Westernise” China. He remains a fierce critic. Karl Marx, he says, would have agreed with the view that economic liberalisation leads to political change. “It’s a matter of time,” he says. Perhaps Mr Clinton can draw comfort.