Being a monopoly is fine if you are state-owned

The leading financial magazine Caijing summerizes twenty years to legislative work on the anti-trust laws.

However, questions remain about implementing and enforcing the voluminous law, which includes 57 articles and eight chapters. In addition, some sensitive issues raised during decades of discussion were dropped or glossed over with vague language.
For example, the issue of administrative monopolies -- which are common in local governments and influence national sectors including telecommunications, electric power and education – is covered in the fifth chapter but not covered by the initial definition of a monopoly in the first chapter, said legal professor Dr. Wang Baoshu of Tsinghua University.

Yahoo! lied in Shi Tao's case

Shi Tao

Rconversation points at new material found by the Dui Hua foundation that proves Yahoo! legal counsel has been lying in a congressional hearing when he said that his company did not know why the judicial authorities in Beijing wanted to go after the journalist Shi Tao.
Shi was - with the help of Yahoo! - convicted to ten years of jail for giving state secrets to foreigners.
The Dui Hua foundation has translated the original document. Rconversations links to it all.

Update: The Dui Huai foundation comes with additional prove in other cases Yahoo knew why the police was after journalists and internet users.

Only six face jail in Shanxi kiln scandal

Only six lower-ranked official will face criminal prosecuting, Shanxi government officials announced on Monday, writes Howard French in the International Herald Tribune. Not surprisingly, angry citizens are not pleased.

The announcement ... unleashed a torrent of strongly critical commentary on the Internet, with thousands of people in news discussion groups and on blogs denouncing what were widely perceived as light punishments, and questioning the failure to pursue criminal charges or allegations of corruption.
A serious political incident was first turned into a serious criminal case, and then slowly transformed into a matter of ordinary malfeasance," wrote one online commentator. "Once all of these rustlings are over, the same things are bound to happen again."

Update: Was obvious wrong here. One has been sentenced to death and 28 to jail, says the BBC.

How far can you go in blaming your employer

The case of a disgruntled foreign lawyer at a Chinese law firm is now definitely getting out of hand. Danwei reports they saw (and got screen shots) at Google ads of what appears to be a fake ad of the Zhong Lun Law Firm that in fact leads to the weblog of the lawyer.
I first decided to follow this case. An employee using a weblog to get even with an employer is an interesting case, regardless who is right or wrong. Obvious, Jeff Brauer was angry and it is always nice to have a peek in those private affairs.
The original post has now been deleted, after Jeff got a visit from his former boss and managing partner he perceived as threatening. But at least the managing partner promised him he would get the money he was entitled to and Jeff would delete the blog. He then did delete some entries but went on to disclose some practises at his former law firm that would suggest bribing judges. When you are in it for a compensation, not the best way to please your former employer.
Other, now deleted, posts had already raised my doubts on his ability to make sound judgments on what is really happening in China (here one in the Google-catch).
Obvious Jeff sees China as a country where law has no value and he has now decided to ignore the law himself. That might again illustrate some rather poor judgment skills that would become a major problem in seeking new employment.

Update: Well, the case seems to be settled, out of court and out of the blogs.

Working for a Chinese law firm

You thought that only migrant workers had problems in getting paid by their Chinese bosses. Well, according to this US lawyer Jeff the same happened to him when he worked for a Chinese law firm, the Zhong Lun law firm in Beijing. Unlike most migrant workers, this lawyer stared a weblog to document his complaints. That has now been discovered by one of the partners in his law firm and she is now rather angry:

I have seen your blog. You are the biggest liar I have ever seen in my life. You are seriously sick and need to see a doctor. By the way, I am not threatening you. I am going to sue you - that is exactly what I am going to do, and I will sue you for a huge amount of damages.

I'm going to watch this for a while.

The so-called IPR-losses

"I'm not sure you would agree," writes Shaun Rein in an email where he announces his latest contribution to Business Week, this time a strategy to beat piracy.
Well, Shaun for sure takes off at wrong leg by simply copying the figures the US companies claim they have been losing on piracy in China.

Some of the numbers are startling. The Business Software Alliance estimates that in 2005, 86% of all software used in China was pirated, accounting for a $3.9 billion sales loss.

That is an old trick: the BSA does as if there would be a market for legitimate software in China for US prices. That is not the case, but you do get nice big figures in that way.
Also, the assumption that Chinese consumers want rather genuine products in stead of the fakes as soon as they can afford it sounds rather outlandish:

One positive sign is that Chinese are in many ways no different from other consumers. Millions are entering the ranks of the middle class, and they want to look the part of the urban aristocrat. If they cannot afford genuine items they turn to touts on the street hawking fake Louis Vuitton, Tiffany (TIF), Montblanc (CFR.VX), olex, and Polo (RL) items. But as Chinese consumers become increasingly sophisticated, the situation is changing. Now consumers can value the difference between a real Giorgio Armani tie and a fake one.

I have no proof this is wrong, apart from the observations of the purchasing pattern. Now the Xiangyang market has been closed, they walk the extra mile to get their fakes. When asked by a researcher they would of course always deny they would buy fakes.
Probably there are some more items I would not agree on, but have to prepare to leave to Beijing right now. Will read the article further when the combination of time and wifi's allows.
(I like the way how he throws with name: that will make the search engines very excited.)

Who owns your brandname?

An interesting twist in the struggle between Danone and Wahaha, fortunately closely followed by AllRoadsleadtoChina. After some legal setbacks, Wahaha has played an interesting card. Wahaha's Zong's says that the Wahaha brandname was never transferred to Danone, so they cannot complain about him using it.

If this Is proven true, and the arbitrator’s find for wahaha… Well, needless to say we have a whole different ballgame… And danone is going to wish they paid zong the premium he was asking for.

The story is becoming more fascinating by the day. My bet is on Wahaha: not only are they in the best position to win this power struggle, they might have some strong legal arguments too.

Yahoo and free speech

I'm quite sure that it is about time that Yahoo and China Yahoo (or is it still Yahoo China?) hould talk to each other again, since I'm convinced that Jack Ma, who runs their China operations might have some misgivings about Yahoo's latest moves.
In short, when Yahoo China was not yet sold to Jack it helped the Chinese authorities to jail journalist Shi Tao for ten years. Then it sold most of its China operation to Jack Ma and tried to ignore accusations that they helped in jail a Chinese journalist.
Now, obvious that is no longer possible now Shi and others are suing Yahoo in the US. This is their latest:

"Yahoo is dismayed that citizens in China have been imprisoned for expressing their political views on the Internet," the company said in the statement faxed to The Associated Press, which asked Yahoo to comment on Shi's lawsuit.

Well, we were dismayed already quite some time before Yahoo was asked to defend itself in a US court. It just does not fit. I'm again dismayed and wonder how sincere Yahoo is now.

Update: I was already wondering why Yahoo wanted to cause trouble by themselves. But their shareholders are meeting on Tuesday and that could cause drama, say some.

SFCC discusses the labor contract law

prof. Liu Cheng

The Shanghai Foreign Correspondents Club organizes next week Wednesday a panel on China's draft labor contract law with professor Liu Cheng. Liu Cheng was one of the key debaters in the past few years on how the labor law should look like. He has been very outspoken in criticizing the American Chamber of Commerce for trying to water down the draft law.

He is joint by Ma Jianjun, a labor expert of the Jun He law firm in Shanghai.

From the fact that nobody from the American Chamber of Commerce in Shanghai is there, I assume that they have refused to participate, since I'm quite sure they have been invited. That might make the debate a bit one-sided, but you cannot force accused institutions to defend themselves.

The meeting starts at Wednesday May 30 at 7PM at the Foreign Culture Club at Jululu 889. Timely reservation is advised because of the limited seating here.

Shanghai agency caught in the stock market

A prominent Shanghai government departments has been using its capital to invest in three listed company, against explicit bans to do so, the Financial Times writes. The Shanghai Municipal Housing Maintenance Fund Management has been one of the top-10 shareholder in a variety of companies at the Shenzhen stock market. The agency is in charge of maintaining public spaces and get a levy of two percent on each purchase of apartments.

Fraser Howie, an expert on the Chinese stock market, said it was probable that other government units – including state-owned companies, local government, the police and the army – had been investing surplus funds in the stock market and their holdings could be as high as $125bn.

It reflects the worries by Hu Shuli, chief-editor of the financial magazine Caijing, who blamed the government for not doing enough to stop illegal activities at the stock markets.

Raving reviews for Schaub's book

Mark Schaub

"Again a raving review," yelled my friend, author and lawyer Mark Schaub on the phone earlier this evening. "In the Far Eastern Economic Review by Gordon Chang." Unfortunately, this formerly great magazine is not online, so you have to believe me that I have seen a scanned copy of this combination of dead wood and ink. Since the book makes at least twice fun about Mr. Chang's book, the Upcoming Collapse of China, Mark was pretty relieved most of the review was indeed raving.
Gordon Chang clearly was a bit annoyed ("One day I will have to get even."), but then, it is very hard not to make fun about a book that tells us in 2001 China will collapse within five years, when we are living in 2007 and a collapse looks futher away than ever.
Anyway, I noted many more positive reviews and since Mark Schaub sees because of lack of online activity his own website sinks away in the search engines, I have to show him the power of linking.
Eurobiz of the European Chamber asked Mark himself to write a review. That shows bad judgment on the part of the editors.
Cosmos books calls the book "lively and entertaining", but I seriously doubt whether they have read the book. Also The Beijing Review calls the book "lively and entertaining," so at least it is a spin the media liked. And the Law Librarians Blog call the book, surprisingly, "lively and entertaining".
There is still room for improvement: not too many reviews are online.
Of course I should mention here that Mark Schaub is one of the distinguished speakers in our upcoming China Speakers Bureau. I can assure you from personal observations that his speeches are even more lively entertaining than his book. Do drop me a line, if you have an interest.

Hong Kong wants to criminalize free speech

Peter Yu

At least, that would be the catchy headline I would give to the much more balanced approach by Rebecca MacKinnon when she analyses the debate on digital copyrights in Hong Kong going on now. She links to the position paper Peter Yu wrote and a recent opinion piece, taken away from behind the SCMP firewall.

"Should we turn into criminals the future pillars of our society? Should we slow development of internet services to protect creators of digital content? Should we sacrifice privacy, free speech and a free press in the name of copyright protection?"
Then he answers: "While the copyright holders' concerns are understandable, some of the medicine prescribed in the paper is, unfortunately, worse than the diseases it claims exist."

China Labor Forum 2007

A smaller PRC law firm Trans Asia Lawyers is preparing a major two-day conference on the upcoming labor law in China, their website announces.

Scheduled for the 2nd quarter of 2007 at the Beijing China World Hotel, this 2-day event is intended to facilitate a frank exchange of opinions among senior MOLSS, ACFTU and local officials, representatives of China's leading employers, foreign embassy officials and prominent academics. Simultaneous English translation will be available throughout the event.
The forum will be the first time that senior PRC officials and legislators will appear on the same platform to discuss the new law. It will therefore provide a unique opportunity for attendees to hear authoritative interpretation of the law and to share their own thoughts directly with those individuals.

Essential information like dates and possible entrance fees are not yet given.

March 13 cut-off date for new tax law - official

Legislator Cai Qiaoping slashed hope today that the new tax law, ending preferential treatment for foreign companies, would only start at the end of the year. The cut-off date is 13 March, she confirmed, and foreign companies registered in China after that date would no longer be eligible for the preferential treatment. For older companies there is a grandfathering clause.
Cai spoke at the Asia CFO World, organized by Pearson in Shanghai. She is the director of the legislative department of the Budget Affair Commission of the Standing Committee of the National People's Congress. Cai is probably also one of the main authors of the law.
It was good to see she was explaining the law and answering questions of an audience, greatly adding to the process of transparency.

A court fights for its independence

the Chongqing nailhouse

ESWN translates a great feature story in the Southern weekend that uses interviews with the main parties involved in this the cause of the Chongqing nail house, including Mrs Wu Ping. It is a great case study on change in China, but I want to stress one interesting element: the Jiulongpo district court director Zhang Li, is one of the main players in this drama.

He said that the pressure of the "nail house affair" was something "he had never encountered in forty years of living and may be a once-in-a-life-time thing."

Zhang Li had just started his job in this district on March 17 and got a crash course in media relations and discovered the power of the internet:

"At the time, I felt that it was a troublesome thing to deal with the media. I was afraid that I might say something wrong. I turned down media interviews. In retrospect, I can frankly say that I regret that." Almost a month later, he reflected to the reporter.

Zhang Li effectively refuses to join press conferences with the local government. He insists that his court should remain independent and throws himself into some arguments. He gets support:

As district party secretary, Zheng Hong recognized this. "In other countries, government officials and judges will not sit down together. But foreign reporters do not understand party leadership in China." In the end, the court held its own press conferences. Similarly, when the government held its own press conferences, the court did not participate.

Hectic scenes display at the government offices and many officials, including Zhang Li have sleepless nights. He has to oversee the negotiations, since his relative independence as a newcomer in the district. Chongqing was able to avoid a worst-case scenario.
Really worth to read the whole article.

Mrs Wuping

Chongqing's incredible house gets a face

You might remember the pictures I published earlier (as this many others) on the incredible house in Chongqing and the many stories that were emerging on the internet.
While the local media could not publish about the most famous house in Chongqing, the stories kept on spreading on the internet, often hardly based on any facts. But that forced national media like CCTV to bring the story and Venture160 did a great job in translating the interview. It is a very nice combination of story-lines and illustrates how courts, property developers, local government and the media interact, with the internet as a major destructive force (from almost every perspective.)

Mark Schaub

"Headquarters should be more involved in their China-operation"

Lawyer and author Mark Schaub spoke this evening in Shanghai at the Garden Bookstore at Changle Lu during the presentation of his recently published book, China - the Art of law. His message of this evening: headquarters should not abandon their China operation after they signed a contract.
Schaub: "Ninety percent of the effort and financial resources is spend to set up the operation. They hire PWC, McKinsey and a law firm to help them to make things right. Then they hire a general manager, often a new kid at the block, and everybody goes home. That is not right. The headquarters back home should be involved in their China operation."
Mark Schaub is one of the prominent speakers we engaged for our upcoming China Speakers Bureau. If you are interested in Mark Schaub as a speaker, please get in touch.