Chinese Law Prof Blog

Editor: Donald C. Clarke
George Washington University Law School

Wednesday, November 10, 2010

Hurting the feelings of the Chinese people

[A Chinese version of this post is available here.]

If you believe what Chinese government spokespeople tell you, the Chinese people are a delicate, sensitive lot; picture 1.4 billion Lin Daiyu’s and you’ll get the general idea. It seems they are constantly having their feelings hurt by cloddish and ill-intentioned foreigners. Yet who are the worst offenders? This vital empirical question has finally received the attention it deserves; the results are reported here (in Chinese only; sorry).

The study, by a young Chinese journalist, examines an electronic database of the People’s Daily for the years from 1946 to 2006. If the study is accurate, the feelings of the Chinese people were hurt only once before 1978 – by Indonesia, way back in 1959 – but since then all continents have pitched in, with the sole exceptions of Australia and Antarctica. (I believe the Aussies sullied their record of inoffensiveness after 2006.) The worst offenders? The Japanese, of course, at 47 instances. The Ugly Americans are a distant second at 23, and even if you credit all of NATO’s offenses to them don’t manage to get more than another 10. The Indians come next at 7 instances, while the French and Germans belie their national stereotypes with a mere 5 and 3 instances respectively.

For a map of offensiveness, check out this blog post.

November 10, 2010 in Commentary | Permalink | Comments (0) | TrackBack (0)

Fellowships in human rights/legal pluralism at McGill Univ. Faculty of Law

Here's something that isn't necessarily about Chinese law, but certainly includes it as a possible subject matter:

The O’Brien Fellowship was established in 2005 through a very generous gift from David O’Brien (BCL ’65) for outstanding graduate students studying in the area of human rights and legal pluralism in the Faculty of Law.

More information at the following links:

November 10, 2010 in Fellowships/Research Opportunities | Permalink | Comments (0) | TrackBack (0)

Tuesday, November 9, 2010

Thoughts about mandatory versus non-mandatory rules in Chinese corporate law

[A Chinese version of this post is available here.]

I attended an interesting conference in Beijing on Nov. 6th on practical issues in corporate law litigation in China. There were a number of judges there who spoke about the kind of cases they were seeing.

I was asked to talk for three minutes about mandatory versus non-mandatory rules in corporate law. Having only three minutes, like the prospect of being hanged, concentrates the mind. Here’s the general gist of what I had to say.

First, I made the observation – now unoriginal, I think, in US corporate law circles, but I don’t think widely appreciated in China – that mandatory rules may not be all that mandatory and that non-mandatory rules (i.e., default rules that can be varied if people want to do so) may not be all that optional. Bernard Black famously wrote about the former issue several years ago in his article, “Is Corporate Law Trivial?”, 84 Nw. U. L. Rev. 542 (1990), and the latter point has been made more recently by (among others) Yair Listokin, “What Do Corporate Default Rules and Menus Do? An Empirical Examination,” 6 J. Empirical Leg. Stud. 279 (2009) and Brett McDonnell, “Sticky Defaults and Altering Rules in Corporate Law,” 60 SMU L. Rev. 383 (2007).

Mandatory rules can be evaded if you can choose a different organizational form – for example, you choose to organize as a limited partnership in order to avoid things you don’t like about the law applying to corporations – or a different jurisdiction altogether in which to incorporate. Optional rules may not be so optional if it’s costly for some reason to choose something other than the default rule provided by the law (and there has to be some default rule).

Particularly when talking about mandatory rules, it occurred to me that the Chinese participants at the conference might be thinking to themselves, “Well, it may be true in the US that you have a huge menu of organizational forms and jurisdictions of incorporation from which to choose, but what’s that got to do with China? That’s not the reality we face here.” Precisely. Business people in China face a much more restricted set of choices. First, there is only one company law: the national one. There is no jurisdictional competition within China. Second, incorporating abroad creates as many problems as it solves. Among other things, foreign companies are subject to considerable restrictions on what they can do in China. Although Lenovo went this route, incorporating in Hong Kong, not many companies can as a practical matter follow in its footsteps. Finally, China’s laws on business organizations – mainly the Company Law and the Partnership Law – offer much less choice of organizational form to businesses. If you want to list your stock publicly, for example, you must be organized as a joint stock company (gufen youxian gongsi, also translated as “company limited by shares”).

What’s the significance of this? It means that Chinese should be especially careful about borrowing mandatory rules from jurisdictions where extensive choice in fact exists. There is a tendency to think that Delaware or the Model Business Corporation Act must have it right in many respects, and that where something is mandatory in those statutes there should therefore be at least a presumption in favor of making it mandatory in China. But a mandatory rule in Delaware has to be understood in context: it’s mandatory in a world where you don’t have to incorporate in Delaware and where you may not have to be organized as an ordinary corporation. In this sense, then, companies subject to Delaware’s rules have all chosen to be subject to them and we can assume that the rules can’t be too burdensome to those companies.

In China, however, such a mandatory rule would have a much stronger effect. Companies could not easily opt out. Thus, companies for whom the mandatory rule was highly burdensome would have no escape. In other words, importing mandatory rules from jurisdictions where real choice exists is importing something that doesn’t really exist in the country of origin. China will end up with a company law that is much more rigid than the company law of the jurisdictions it is trying to emulate.

November 9, 2010 in Commentary | Permalink | Comments (0) | TrackBack (0)

Sunday, November 7, 2010

Yale China Law Center seeking Beijing fellow

I have been asked to post the following job announcement:

The China Law Center at Yale Law School is seeking applications from American-qualified lawyers for an open position of Fellow or Senior Fellow in the Center’s Beijing office.  This position requires working with senior Center staff to identify, design, and carry out research, academic exchange and collaborative projects involving U.S., Chinese, and other legal experts on topics relevant to Chinese law and policy reform. For details, please see this job posting.


November 7, 2010 in Fellowships/Research Opportunities, Internships/Employment Opportunities | Permalink | Comments (0) | TrackBack (0)