Saturday, June 23, 2012
Just in case anyone was naive enough to believe that the Chinese government's tax case against Ai Weiwei was really about tax and not just a flimsy cover for harassment on political grounds, the Chinese government itself has once again helpfully made its real motivations clear. Readers may recall that Ai Weiwei was originally taken away with no notice being given to his family of his whereabouts, held incommunicado for three months, accompanied 24/7 by uniformed police who were never more than 30 inches away, and subjected to intensive interrogation about his blog and other matters, but never about tax issues. Not typical treatment for someone suspected of evading taxes. (See NYT article here.)
Ai subsequently brought a lawsuit against the Beijing tax authorities, which was surprisingly accepted by the court. But on Wednesday (June 20) he was blocked from attending a hearing in his own case.
Apologist-du-jour Eric Li seems not to have gotten the memo: he still says that Ai Weiwei got into trouble (and properly so) for speech offenses.
Just in case there are any people doing business in China who read this blog but do not read Dan Harris's China Law Blog (which I highly recommend), be sure to check out the latest post on how not to become a hostage for your company's debt (or your own). Adds Dan at the end: "And just to scare you a little bit more, I have a friend who works for a high end China risk consultancy and he tells me that they started seeing a massive increase in these cases this year."
Thursday, June 21, 2012
A recent post on WFOE-formation over at the China Law Blog confirmed my view of some remarks that struck me as asinine when they were first reported last year: Coca-Cola CEO Muhtar Kent's statement that China had a more business-friendly environment than the United States. OK, if you're the CEO of a major multinational being wined and dined as you hobnob with senior leaders, maybe China looks pretty good. But is the Chinese economy really going to achieve sustainable development by catering just to the needs of major multinationals? How about the smaller enterprises that create employment and innovation? The difficulties faced by small and private companies in getting financing in China are well known; I won't go further into that issue here. But look at what's required (among other things) just to set up a wholly foreign-owned enterprise in China:
5. Lease on office space for the WFOE. The lease must be valid for at least one year beyond the eventual approval date for the WFOE. Since approval may take some time, it is best to have the initial term of the lease be at least one-and-a-half to two years. The lease must be in proper format and must be registered with the local real estate authority. We will also need proof that the landlord owns the property in question and has the authority to enter into the lease. This is usually proved by provision of a land rights certificate and proof of existence of the landlord (National ID for an individual, business license for a company). We will work with you during the leasing phase to ensure the lease is properly executed and that the landlord has proper authority. Prior to your entering into the lease, we will determine whether the proposed use is permitted for the premises and whether the proposed address is acceptable for a WFOE. Leases are often the biggest obstacle for WFOEs, so this is a matter to address right away. Note also that the specific details of the documentation requirements for a WFOE depend on the district where the WFOE will be formed. We therefore need to know the proposed address for the WFOE or at least the proposed district before we can make a final determination of the exact procedures that will be required for WFOE formation. Note also that we cannot even begin the registration process in China until we know the address of the proposed registered office for the WFOE, as well as the proposed use. This highlights the importance of the lease in the registration process.
6. We must specify the scope of business of the WFOE. Please provide a statement of what services the WFOE will perform on a daily basis. We need reasonable detail for this, but no more than one page. The scope of business should address the following questions, among others:
- How many employees will be working there? Are they full-time or part-time? Will they be working in the leased space or off-site?
- Will the number of employees vary over time?
- What is the nationality of these employees?
- What will each of these employees be doing in this rented space – will they be programming? consulting? buying? selling? manufacturing? providing customer support? managing other employees? something else?
- Who are the customers of the business? That is, who will be paying for the services provided by the WFOE?
- What is the projected cash flow of the business? Where will income go (i.e., to the WFOE, to the parent, to an affiliated entity)? How will expenses be paid (i.e., directly by the WFOE, by the parent, by an affiliated entity, etc.)? Where will the WFOE get its money to operate?
The scope of business will also be used in the company name as noted in Question 4. above.
No doubt some reasonable justification could be found for any particular one of these hoops to be jumped through, but when you put them all together (and remember, I'm just citing a few of them) one cannot avoid the feeling that the authorities view businesses as basically operations that are Up To No Good and that need to be carefully monitored and controlled. The idea that the future is unpredictable and that businesses should be able to adjust quickly to changing circumstances seems utterly alien to this regulatory model.
Note that the model also assumes that the bureaucrats reviewing information about, say, the number and duties of employees or the projected cash flow will have the expertise to use that information to make decisions that serve whatever government policy they are supposed to be implementing in their decision-making. Color me doubtful.
A colleague has brought the following opportunity to my attention: The USTR has advertised two attorney vacancies in the General Counsel’s office, at the GS-13 to GS-15 level. The key element appears to be the ability to read and analyze business and legal documents in Chinese. US citizenship is required, as is completion of a JD from an ABA-accredited law school and membership in a US bar.
Closing date: June 26, 2012
Incumbent provides legal support for USTR personnel in connection with sectoral, bilateral, regional, and multinational trade negotiations. Incumbent also provides legal advice and represents the United States in dispute settlement proceedings convened under the World Trade Organization (WTO) and U.S. free trade agreements (FTAs), and other trade agreements. In addition, incumbent provides legal advice to USTR personnel on U.S. trade law and policy, U.S. international trade obligations, foreign government compliance with trade agreement obligations, and the application and implementation of international trade agreements under U.S. law. The position requires the ability to read and analyze business and legal documents in Chinese. Experience researching Chinese laws and measures and litigation experience are preferred. The position requires familiarity with U.S. trade laws and U.S. rights and obligations under international trade agreements, particularly WTO agreements and U.S. FTAs. In addition, the position requires familiarity with the operation of dispute settlement procedures under U.S. trade agreements and the reports of WTO and FTA dispute settlement bodies. The position requires a high level of motivation, strong interpersonal skills, and management of a demanding workload.
Wednesday, June 20, 2012
Well-known attorney Li Fangping (李方平) has brought a lawsuit against a Beijing company for discrimination against people without a Beijing hukou (official domicile) in a bicycle rental program. The program seems to be designed to work like a lot of bike rental programs in other cities: bicycles are placed in various locations around the city, and you can pick one up from any location and return it to any other location for little or no charge (thus, "rental" isn't quite accurate). In the Beijing case, brief usage is free, and more extended usage costs a bit. The program is open to people who hold second-generation Beijing identity cards. (The 2G cards have a chip in them, unlike the first-generation cards, which just have information printed on them.)
The Beijing government has responded to criticism of the limitation by saying that the program relies on the technology in the 2G cards, and anyway it's just a pilot program that will later be extended to non-domiciliaries. (Note that Beijing has many people who are in fact residents but aren't officially domiciled there.) Li points out that other cities seem to manage similar programs using 2G cards without limiting them to residents. I'm not competent (and don't have time) to assess the merits of these arguments based on the single report I saw of this.
One interesting feature of this case is that as with many governmental programs, it's apparently carried out not directly by a governmental agency but by a company that no doubt has strong governmental ties and support. (If it were operating solely on a profit-making basis, it probably would not offer free use of the bicycles.) According to the report, Li's complaint charges it with "discrimination". But of course to discriminate is just to make distinctions, and not all forms of distinction-making are invidious or illegal, and different rules typically apply to government agencies on the one hand and private actors on the other. It will be interesting to see how this case, assuming it's accepted by the court, is argued and decided.
Friday, June 8, 2012
For all those (including me) who have ever thought that loosening the bonds on China's financial press would, by improving the quality of information out there, go a long way toward improving China's corporate governance, this Caixin report (in English) makes sobering reading. What the financial press wants in many cases, it seems, is not information but good old baksheesh. They will shake down IPO companies for cash with the threat of publishing negative stories.
Just by coincidence, I heard the same complaint just a few days earlier from a businessman whose company had recently had an IPO. He said that China's financial press was all corrupt (黑). I asked him if that included Caixin, which has always had a good reputation. He said he wouldn't include them in the indictment.
Thursday, June 7, 2012
Mark Cohen at the China IPR blog announces that "[w]ith the impending departures of Nancy Kremers in Beijing and Conrad Wong in Guangzhou, two key PTO positions in China are now opening up."
Please go to his blog post for fuller information and links to the official job postings.
Here's the announcement:
FALL 2012 INTERNSHIP ANNOUNCEMENT
Congressional-Executive Commission on China
Deadline: July 1, 2012
The Congressional-Executive Commission on China (www.cecc.gov) is offering paid internships to qualified undergraduates, graduate students, or recent graduates this coming fall in Washington, D.C. Interns must be U.S. citizens. The application deadline is July 1, 2012 for the Fall 2012 internship that runs from September to December 2012. Fall internships are part-time; interns are expected to work from 15 to 20 hours per week. See application instructions below.
CECC internships provide significant educational and professional experience for undergraduates, graduate students, or recent graduates with a background in Chinese politics, law, and society, and strong Chinese language skills.
Interns work closely with the Commission and its staff on the full array of issues concerning human rights, the rule of law, and governance in China (including criminal justice, democratic governance institutions, environmental problems, religious freedom, freedom of expression, ethnic minority rights, women's rights, etc.).
Interns perform important research support tasks (often in Chinese), attend seminars, meet Members of Congress and experts from the United States and abroad, and draft Commission analyses. Click here for CECC analysis of recent developments in the rule of law and human rights in China. Interns may also be trained to work with the Commission's Political Prisoner Database, which has been accessible by the public since its launch in November 2004 (click here to begin a search).
The CECC staff is committed to interns’ professional development, and holds regular roundtables for interns on important China-related issues.
Fall 2012 interns will be paid $10/hour. Those unable to apply for Fall 2012 internships may apply for the Spring (February-May) or Summer (June-August). Further details are available on the Commission's Web site at http://www.cecc.gov/pages/general/employ.php.
- Interns must be U.S. citizens.
- Interns should have completed at least some China-related coursework. It is also desirable that they have some background in one or more of the specific human rights and rule of law issues in the CECC legislative mandate.
- Interns should be able to read Chinese well enough to assist with research in newspapers, journals, and on Web sites. More advanced Chinese language capability would be a plus. The successful candidate for an internship often will have lived or studied in mainland China, Hong Kong, or Taiwan.
- Although our interns are generally undergraduates, graduate students, or recent graduates, others are also welcome to apply.
Application Instructions for Fall 2012:
Interested applicants should send a cover letter, resume, and the names and contact information for two references, to the CECC via e-mail to Judy Wright, Director of Administration at email@example.com by July 1, 2012. Applications must be received by our office no later than 11:59 P.M. Eastern Time on July 1. Please discuss in your cover letter how your professional goals, interests, and background relate to the Commission's legislative mandate regarding human rights and the rule of law in China. No phone calls please.
Wednesday, June 6, 2012
Tuesday, June 5, 2012
Google has released a feature that allows mainland Chinese users to search for search terms words that will cause their conection to be cut off. The China Digital Times has translated 456 of them. It's like an arms race; netizens search for Zhou Yongkang (the head of the Central Political-Legal Committee and therefore the man in charge of the legal and security apparatus), so that's blocked; then they search for "Master Kang" (康师傅) (because the "kang" character is the same), the brand name of a type of instant noodles, so that's blocked; then they search for "instant noodles" (方便面), so now you can't even search for instant noodles on the Chinese internet. (Don't even get me started on why you can't search for "teletubbies".)
There's a word for this. And it's in the DSM.
Monday, June 4, 2012
I don't want to let June 4th pass unnoticed, but neither do I have time to write a blog post that would probably just repeat what others have said many times already. Let me then just link to a good post on the China Law and Policy blog that discusses The Fat Years, a recently-published translation of Chan Koonchung's (陈冠中) 盛世. The novel is (among other things) about forgetting and the complicity of the forgetters in state efforts to get them to forget.
In my little corner of the intellectual universe, where we discuss Chinese law, issues of values are often intertwined with issues of facts and interpretation. One often-voiced mantra is the idea that we mustn't impose our values on others. This idea has too many problems for me to dissect them all in a single post (who are "we"? how do we identify the dividing line between "us" and "others"? what counts as "imposition"?). What I want to do here is point out one particular problem, which is that figuring out the values held by the Other is a difficult project. The Other is rarely homogeneous, and the result is that usually the values of the elite Other get taken for the values of the whole Other, leading of course to profoundly conservative results. (This is why elites love to be able to label someone an outsider and then assert that he may not impose his values.)
The Constitution of Japan turned 65 last month, and so it's a good moment for reflection on this document. It is almost without peer in the length of time it has lasted without formal amendment. Those who want to change it, in particular Article 9 (which commits Japan to pacifism), argue that it was imposed by MacArthur in the post-WW2 occupation. But David Law's argument in the ConstitutionMaking.org blog make a lot of sense to me:
MacArthur definitely did *not* have permission from Washington to write a constitution for Japan, but instead saw and seized an opportunity after the Cabinet proposed a deeply conservative document that the Japanese public rejected, and he ended up proposing something with much stronger popular support than Japan's own government could muster. Its longevity should therefore come as little surprise: what democratic constitution can endure for over six decades unless it enjoys enduring popular support? Therein ought to lie a valuable historical lesson for those who argue that constitution-making in post-occupation settings (Iraq, Afghanistan?) is about cutting deals among elites, popular opinion be damned. The lesson is: actually, the people do matter. If that's too much to ask, then one at least hopes that scholars won't draw from Japan the wrong lessons about the viability of "imposed constitutionalism".
Imposing something that has no local support is, of course, a dead end. But we ought to be cautious about making or accepting assertions that something has no local support, or doesn't resonate with the alleged values of an alleged culture. And of course arguing over whether something was imposed is a good way of deflecting attention from what people ought to be arguing about, which is whether it's actually a good idea.
Saturday, June 2, 2012
I have received the following announcement:
Chinese Media Legislation and Regulation: Trends, Issues and Questions.
The Programme in Comparative Media Law and Policy (PCMLP) at the University of Oxford is organizing a conference on Chinese media legislation and regulation, in Oxford, on 15 and 16 June 2012, on emerging issues in Chinese media legislation and regulation. China’s media landscape has undergone tremendous change over the last few years. Technological innovation and the explosion of Internet use have changed the landscape for the dissemination of entertainment and information. Provincial television channels have boomed. Privatization and foreign investment and influence have become important questions for consideration. The cultural industries have become a priority area for further economic development. At the international level, media trade is one of the most prominent issues between China and the United States. Electronic media have also become a channel for bottom-up political activity: increasingly microblogs are used to bring specific incidents into the public sphere, or for satirical expressions.
Friday 15 June
Session 1: The structure of Chinese media governance
This session will provide a general overview of the way in which the Chinese media are organized. Topics to be addressed include the development of content regulation in China, the structure of the media control regime and the theoretical background of media governance.
Session 2: The market and the mediaChinese media have become increasingly marketized, as they have become an increasingly important locus of economic activity, as well as fulfilling a political role. However, commercial interests often clash with political and social objectives. This session will look at the regulation of advertising as an example of this, as well as the burgeoning animation sector.
Session 3: The development of defamation in ChinaThe expansion of China’s online population has fundamentally changed the public communication sphere. For perhaps the first time in history, Chinese individuals have easy access to tools of public communication. One of the consequences of this, is that the number of disputes between private parties concerning expressions on social media has risen sharply. This session will provide more insight into the different aspects of defamation cases, and will aim to theorize the emerging legal doctrines in this field.
Saturday 16 June
Session 4: Press regulationThe traditional press remains an important channel for public communication. Traditionally, it was considered to be the mouthpiece of the Party, but as China’s society and political structure has grown more complex, fragmentation has rendered this characterization obsolete. Nonetheless, the Party-State aims to adapt its control over journalism to better suit changed circumstances. This session will address which measures are being taken, for which purposes and what their effect is.
Session 5: Copyright, telecom and economic regulationFollowing technological development, media require an increasingly complex technological support structure. Questions of network access, telecommunications and network integration are crucial as a framework for the content industries to develop. Similarly, the role of intellectual property rights as a governing mechanism is important in explaining the particular setup of the information order. This session will address a number of these questions, in particular in relation to industrial policy, innovation and their effect on media markets.
Venue: Manor Road Building, Seminar Room A.
Participation in this conference is free of charge, but participants are kindly requested to register with Rogier Creemers (firstname.lastname@example.org). Sandwich lunch will be provided on both days.
For further information about PCMLP, please see: http://pcmlp.socleg.ox.ac.uk
Friday, June 1, 2012
I just posted a notice about the above position but hadn't read the job description. Now that I have, I really have to wonder whether anybody has thought this thing through. They are requiring someone with a Chinese lawyer certificate. This raises at least two questions:
- Why? Nothing in the job requires somebody to engage in the practice of Chinese law, and indeed, anyone holding the job would probably be forbidden to do so, since practicing Chinese lawyers need to work in a properly registered law firm (or be properly registered solo practitioners). Of course, to ask for knowledge about the Chinese legal system is reasonable, and to make bar passage a proxy for such knowledge would be understandable (although inaccurate). But to have passed the bar is not the same as holding a Chinese lawyer certificate.
- Holders of Chinese lawyers certificates must be Chinese nationals. Yet various aspects of the job description clearly contemplate that the successful applicant could be a US citizen.
Do they really mean to say that only Chinese nationals may apply? That's the effect of the lawyer certificate requirement, the need for which is not obvious in the first place.
I'll be happy to post any explanations or clarifications anyone wants to send me.