Um... Yes... But, I was an unwitting dupe. I swear I realized just a few days later that I had been duped. And the subject matter, the Director of the Beijing Intellectual Property Institute commenting on the new U.S. patent laws, was more than appropriate for this blog. I soon discovered that this email was sent to many bloggers. The message implied that the U.S. was weakening its intellectual property rights in patent on par with China, which everyone "knows" has a horrible IPR record. Well, today I received a much more explicit email from a similar group, asking me to post a list of letters in opposition to patent reform sent to Senators. Rather than printing this, I would instead like to discuss one of the implications of patent reform.
The major change to our current system in the Patent Reform Act of 2007 is changing the US system from the first to invent gets a patent, to the first to file the patent is entitled to the patent. This would put the U.S. in line with the patent systems of the rest of the world. That's all fine and well, but a first to file system means that inventors must file for a patent, and therefore disclose their invention, as soon as possible if they want to receive patent protection for the statutory period. As the law currently stands, the patent must be filed within one year of invention. Under the current system, inventors have one year to develop complimentary technologies, and business strategies before disclosing their patent to the rest of the world. Once a patent is disclosed, other inventors can begin working on patent workarounds to produce a (not too) similar invention.
The main bill supporters are Microsoft and Oracle. The main bill opponents are start-up companies and other small inventors. A first to file system incentivizes early disclosure of the invention, and the earlier the invention is disclosed the earlier others can begin inventing workarounds. The "Big-Boys" like Microsoft and Oracle are in a much stronger position than small companies to muster resources to quickly develop products and enter markets based on a patent than the small companies which have about a year to dedicate to this process under the current system.
IP law is tasked with finding a balance between the free use of ideas to further innovation, and rewarding and restricting the use of new ideas to encourage innovators. A first to file system places a weight on the free use of ideas side of that scale, and legislators have the unenviable task of determining if there is balance. Whatever the answer, I don't see the current bill turning the U.S. into the perceived Caribbean that is China.
For more on the other interesting points of the Patent Reform Act of 2007, checkout this link.
Wednesday, January 30, 2008
Tuesday, January 29, 2008
Corporate Social Responsibility in China
The idea of corporate social responsibility (CSR) is intriguing. Consumer attitudes imposing social values upon corporate practice by choosing products made responsibly by principled corporations. In essence: the cruel, nasty, and unforgiving free market making the world a better place through the power of consumer choice. Critics of capitalism have long clung to the idea that the inherent competition leads to conflict, and conflict in capitalism reinforces the unfortunate Hobbesean conclusion that man's life is "solitary, poor, nasty, brutish, and short." And then CSR, the classic liberal's wet dream, comes and spoils the party by showing the world that soaring profits can go hand in hand with doing good.
CSR takes many forms. At the consumer level, consumers have choices between goods such as "Free Trade" coffee, and organic clothes and foods, and recycled goods. In a study (pdf) by Michael Hiscox and Nicholas Smyth, they placed two sets of towels in a store, one with a label describing how the towel was produced under fair and safe labor conditions. Over 5 months, they experimented by raising the price of the towels carrying the label, and even switching which towels carried the label. The sales of the towel that carried the label increased, and demand was "very inelastic" with up to a 20% increase in price. Both sets of towels were already produced under good labor conditions, and this goes to show that showing customers just how socially responsible a business makes those customers willing to pay more for otherwise identical goods.
On the other end of the scale are large companies directing their for-profit arms to doing good. Internet behemoth Google has more going for it in the CSR arena than their negatively phrased informal motto, "Don't be evil." Google is on the CSR warpath with Google.org, a division funded with 1% of Google's equity and annual profits. Google's idea is similar to the Bill Clinton Foundation (with a fine chronicle at The Atlantic)--make profits while doing good on a large scale in areas of the world that need "good done." Not being evil is, presumably, much easier than doing good. The for-profit aspects of these do-gooding schemes makes them a far-cry from straight philanthropy such as Carnegie's libraries.
In the middle, consumer demands mesh with profit-seekers at a higher level than consumer goods. We see the growth of green building, a demand for affordable yet profitable renewable energy, and cleaner manufacturing processes.
Though many corporations apparently believe that China is a fine place to escape social responsibility, an article in The Economist calls China "the new frontier for the CSR industry." The article identifies three areas from which pressure is coming. First, the government is pressuring companies to become more environmentally responsible, which hopefully (likely?) has more to do with the government looking out for the welfare of its citizens than with outside pressure. Second, foreign investors "want to apply their ethical standards across their supply chain," and are doing so by implementing any of the myriad of global standards from ISO to SAI. Third, as Chinese companies go global, they find that potential customers in the developed world do not take kindly to, say, doing business with Sudan. But, growth is currently the primary concern of Chinese companies. Greater CSR will come later, it is just good know that widely implemented CSR is in the back of their minds.
CSR takes many forms. At the consumer level, consumers have choices between goods such as "Free Trade" coffee, and organic clothes and foods, and recycled goods. In a study (pdf) by Michael Hiscox and Nicholas Smyth, they placed two sets of towels in a store, one with a label describing how the towel was produced under fair and safe labor conditions. Over 5 months, they experimented by raising the price of the towels carrying the label, and even switching which towels carried the label. The sales of the towel that carried the label increased, and demand was "very inelastic" with up to a 20% increase in price. Both sets of towels were already produced under good labor conditions, and this goes to show that showing customers just how socially responsible a business makes those customers willing to pay more for otherwise identical goods.
On the other end of the scale are large companies directing their for-profit arms to doing good. Internet behemoth Google has more going for it in the CSR arena than their negatively phrased informal motto, "Don't be evil." Google is on the CSR warpath with Google.org, a division funded with 1% of Google's equity and annual profits. Google's idea is similar to the Bill Clinton Foundation (with a fine chronicle at The Atlantic)--make profits while doing good on a large scale in areas of the world that need "good done." Not being evil is, presumably, much easier than doing good. The for-profit aspects of these do-gooding schemes makes them a far-cry from straight philanthropy such as Carnegie's libraries.
In the middle, consumer demands mesh with profit-seekers at a higher level than consumer goods. We see the growth of green building, a demand for affordable yet profitable renewable energy, and cleaner manufacturing processes.
Though many corporations apparently believe that China is a fine place to escape social responsibility, an article in The Economist calls China "the new frontier for the CSR industry." The article identifies three areas from which pressure is coming. First, the government is pressuring companies to become more environmentally responsible, which hopefully (likely?) has more to do with the government looking out for the welfare of its citizens than with outside pressure. Second, foreign investors "want to apply their ethical standards across their supply chain," and are doing so by implementing any of the myriad of global standards from ISO to SAI. Third, as Chinese companies go global, they find that potential customers in the developed world do not take kindly to, say, doing business with Sudan. But, growth is currently the primary concern of Chinese companies. Greater CSR will come later, it is just good know that widely implemented CSR is in the back of their minds.
Monday, January 28, 2008
Evaluating Model Arbitration Clauses
UPDATED: A lot of traffic comes to this post, and I don't like much of this post anymore, so here's an improved excerpt from a recent post on how I would have liked to improve this post. Followed by the original post.
If you're drafting an arbitration clause you should first go to the website of the organization that you want to arbitrate under. Then read this document and fill in the holes in the clause from the organization you just got a clause from. That document also has some good tips on building step clauses. This JAMS ADR site also has a bunch of arbitration clauses that will help you build an airtight arbitration clause with step clauses, and it is good for filling in holes in your clause.
Note: The ICC clause is missing a lot, but that is only because the ICC is going to fill in all of the holes for you, but beware, you might find yourself arbitrating in Paris, France if you don't include a location.
Original Post
In my International Commercial Arbitration course we are currently covering arbitration clauses. Professor Richard Page advised us that if we want to make sure that we end up in arbitration, then the arbitration clause better be well drafted. Words such as "shall" rather than "may" go a long way towards getting this done. But, the professor suggested that the most sure-fire way of ending up in arbitration is to use the model arbitration clause of the body under which you wish to arbitrate.
A good place to start is with a comprehensive arbitration clause guide at the American Arbitration Association (AAA).
International Centre for Dispute Resolution (ICDR) Guide to Drafting International Dispute Resolution Clauses at AAA
International Chamber of Commerce (ICC) Suggested Clauses
In general:
China International Economic and Trade Arbitration Commission Model Contracts
Hmm... I guess they haven't gotten around to this yet. Might be for the better; CIETAC has had problems with corruption, and it is a little slow. The Shanghai Arbitration Commission (SAC) and Beijing Arbitration Commission (BAC) offer quickness, predictability, likelihood of enforcement, and some dang good arbitration clauses.
BAC Model Arbitration Clause
The BAC makes it easy to find this clause, it is right there on the main page, no scrolling necessary. Concise, and strong, but as we will find from SAC's website, it would be advisable to read Article 16 of the Arbitration Law of the PRC.
SAC Model Arbitration Clause
The strongest arbitration clause for contracts in China could probably be constructed by combining the SAC and BAC model clauses. Using the language of the BAC model clause with the provisos of the SAC, and replacing Shanghai with Beijing where appropriate, seems like it would go a long way towards a binding arbitration clause. The only problem is the lack of a time frame. I am not sure whether inserting a time frame for arbitration would improve the clause, but it couldn't hurt.
If you're drafting an arbitration clause you should first go to the website of the organization that you want to arbitrate under. Then read this document and fill in the holes in the clause from the organization you just got a clause from. That document also has some good tips on building step clauses. This JAMS ADR site also has a bunch of arbitration clauses that will help you build an airtight arbitration clause with step clauses, and it is good for filling in holes in your clause.
Note: The ICC clause is missing a lot, but that is only because the ICC is going to fill in all of the holes for you, but beware, you might find yourself arbitrating in Paris, France if you don't include a location.
Original Post
In my International Commercial Arbitration course we are currently covering arbitration clauses. Professor Richard Page advised us that if we want to make sure that we end up in arbitration, then the arbitration clause better be well drafted. Words such as "shall" rather than "may" go a long way towards getting this done. But, the professor suggested that the most sure-fire way of ending up in arbitration is to use the model arbitration clause of the body under which you wish to arbitrate.
A good place to start is with a comprehensive arbitration clause guide at the American Arbitration Association (AAA).
International Centre for Dispute Resolution (ICDR) Guide to Drafting International Dispute Resolution Clauses at AAA
"Any controversy or claim arising out of or relating to this contract, or the breach thereof, shall be determined by arbitration administered by the International Centre for Dispute Resolution in accordance with its International Arbitration Rules."This arbitration clause also binds the parties to the following under the Rules of ICDR:
The parties should consider adding:
• “The number of arbitrators shall be (one or three)”;
• “The place of arbitration shall be (city and/or country)”;
• “The language(s) of the arbitration shall be ___.”
• Notice requirementsVery comprehensive, and very explicit, and it comes with a nice handy guide.
• Form of Claim and/or Counterclaim
• Interim and/or emergency relief
• Appointment of the arbitral tribunal,
• Arbitrators’ Conflicts of interest
• Scheduling
• Place of arbitration
• Jurisdiction – Powers of the Tribunal
• Conduct of the arbitration - The taking of evidence
• Proceedings in the absence of a party’s participation
• Costs
• The form and effect of the Award
International Chamber of Commerce (ICC) Suggested Clauses
In general:
"All disputes arising out of or in connection with the present contract shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules."In Mainland China:
"All disputes arising out of or in connection with the present contract shall be submitted to the International Court of Arbitration of the International Chamber of Commerce and shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules."Scarce documentation, and from what I can tell the suggested clause for Mainland China is sending the parties to arbitrate before a tribunal at the ICC in Paris. And if not, our professor suggested that the ICC does not take kindly to the application of its rules by other tribunals, and the ICC does not enjoy applying the arbitration rules of others in its own tribunals.
China International Economic and Trade Arbitration Commission Model Contracts
Hmm... I guess they haven't gotten around to this yet. Might be for the better; CIETAC has had problems with corruption, and it is a little slow. The Shanghai Arbitration Commission (SAC) and Beijing Arbitration Commission (BAC) offer quickness, predictability, likelihood of enforcement, and some dang good arbitration clauses.
BAC Model Arbitration Clause
"All disputes arising from or in connection with this contract shall be submitted to Beijing Arbitration Commission for arbitration in accordance with its rules of arbitration in effect at the time of applying for arbitration. The arbitral award is final and binding upon both parties."
The BAC makes it easy to find this clause, it is right there on the main page, no scrolling necessary. Concise, and strong, but as we will find from SAC's website, it would be advisable to read Article 16 of the Arbitration Law of the PRC.
SAC Model Arbitration Clause
“The disputes, arising between the parties of the contract, shall be settled by consultation; the disputes, if may not be settled by consultation, shall be submitted to Shanghai Arbitration Commission for arbitration according to the arbitration rules of the Arbitration Commission.”The SAC further reminds us that Art. 16 of the Arbitration Law of the PRC demands that the parties include the following three provisos in the contract or the arbitration is non-binding:
- Express intent of the parties' wish to arbitrate;
- The issues for arbitration; and
- The arbitration commission selected.
The strongest arbitration clause for contracts in China could probably be constructed by combining the SAC and BAC model clauses. Using the language of the BAC model clause with the provisos of the SAC, and replacing Shanghai with Beijing where appropriate, seems like it would go a long way towards a binding arbitration clause. The only problem is the lack of a time frame. I am not sure whether inserting a time frame for arbitration would improve the clause, but it couldn't hurt.
Saturday, January 26, 2008
Posts of the Week: 1/20 - 1/26
Trial by media and the rule of law at Danwei
This is an interesting piece with lots of truth, but I think that Teng Yun makes a critical mistake. The rule of law is separate from the written laws and the implementation of those laws. In this case the media did not disrupt the rule of law, as much as it brought attention to a specific law that violates the rule of law. A punishment for a crime that far exceeds the crime itself, such as a life sentence for bank's error, is in contravention of the rule of law. By bringing this disparity to the public's attention the media may actually be increasing the rule of law in China by fostering grass roots support for legal reform. Not all laws are good laws, and bad laws can only be changed when the public is aware.
China’s labor law – The reality for overseas investors at China Briefing
It is what it sounds like.
Danone/Wahaha: Learning From Crisis (Part 9) at Managing the Dragon
From the latest in the ongoing intercontinental epic legal struggle, Jack Perkowski advises us that, "the best legal strategy in China is, more often than not, not to have one." Negotiate, mediate, arbitrate, but don't litigate.
Preparation the key to transfer pricing documentation requirements at China Briefing
Implementing the new Corporate Income Tax law.
China Trademarks -- Do You Feel Lucky? Do You? Part II at China Law Blog
More on Brad Luo's Microsoft TM post.
This is an interesting piece with lots of truth, but I think that Teng Yun makes a critical mistake. The rule of law is separate from the written laws and the implementation of those laws. In this case the media did not disrupt the rule of law, as much as it brought attention to a specific law that violates the rule of law. A punishment for a crime that far exceeds the crime itself, such as a life sentence for bank's error, is in contravention of the rule of law. By bringing this disparity to the public's attention the media may actually be increasing the rule of law in China by fostering grass roots support for legal reform. Not all laws are good laws, and bad laws can only be changed when the public is aware.
China’s labor law – The reality for overseas investors at China Briefing
It is what it sounds like.
Danone/Wahaha: Learning From Crisis (Part 9) at Managing the Dragon
From the latest in the ongoing intercontinental epic legal struggle, Jack Perkowski advises us that, "the best legal strategy in China is, more often than not, not to have one." Negotiate, mediate, arbitrate, but don't litigate.
Preparation the key to transfer pricing documentation requirements at China Briefing
Implementing the new Corporate Income Tax law.
China Trademarks -- Do You Feel Lucky? Do You? Part II at China Law Blog
More on Brad Luo's Microsoft TM post.
Wednesday, January 23, 2008
Thou Shalt Not Bribe, or You Can At Least Snitch on Solicitors
Paul Midler has a post at The China Game, Alcatel-Lucent Bribes Chinese, Realizes Solid "ROB", in which he suggests that multinational companies create a return on bribes business ratio for benchmarking purposes. The post is tongue in cheek, but there is unfortunate truth in the matter. In the instance Paul writes of, Alcatel-Lucent settled a bribery case with the U.S. DOJ for $2.5 million on hundreds of millions of dollars of bribes to Chinese, and Paul speculates that Alcatel-Lucent realized hundreds of millions of dollars on top of the bribes. An ROB of ($2.5mil + $100s millions):$100s millions, is pretty good.
An article in the November 2007 China Law & Practice, "Managing Risks in China - Bribery, Corruption, and Little Red Packets," speculates that many companies probably do use an unofficial ROB, as "the atmosphere for doing business in China encourages corruption, because taking risks that may not be legal do in fact pay." A major problem appears to be enforcement issues. Different cities have different minimum bribes for the police to investigate cases. The article says that in Shenzhen, the bribery must involve more than RMB20,000, otherwise they will not investigate. In 2006, the average amount of money involved in bribes that were prosecuted in China was $20,000 USD. Even to an American public official RMB20,000 is a lot of money, and, this is pure speculation, there surely must be a significant amount of bribes below this level that are never even investigated. The article contrasts this situation with Hong Kong where a bribe "of only a few hundred dollars can end up in court."
Allowing bribery is an impediment to the Rule of Law because when bribes are accepted, someone is simply subverting the law. In a sidebar, the article discusses the efforts of TRACE International in promoting commercial transparency around the globe. TRACE created a website called BRIBEline that allows companies and individuals to anonymously report bribe solicitations in 14 languages. The plan is to report the information by country and ministry or sector, with the goal of reducing demand-side bribery.
An article in the November 2007 China Law & Practice, "Managing Risks in China - Bribery, Corruption, and Little Red Packets," speculates that many companies probably do use an unofficial ROB, as "the atmosphere for doing business in China encourages corruption, because taking risks that may not be legal do in fact pay." A major problem appears to be enforcement issues. Different cities have different minimum bribes for the police to investigate cases. The article says that in Shenzhen, the bribery must involve more than RMB20,000, otherwise they will not investigate. In 2006, the average amount of money involved in bribes that were prosecuted in China was $20,000 USD. Even to an American public official RMB20,000 is a lot of money, and, this is pure speculation, there surely must be a significant amount of bribes below this level that are never even investigated. The article contrasts this situation with Hong Kong where a bribe "of only a few hundred dollars can end up in court."
Allowing bribery is an impediment to the Rule of Law because when bribes are accepted, someone is simply subverting the law. In a sidebar, the article discusses the efforts of TRACE International in promoting commercial transparency around the globe. TRACE created a website called BRIBEline that allows companies and individuals to anonymously report bribe solicitations in 14 languages. The plan is to report the information by country and ministry or sector, with the goal of reducing demand-side bribery.
Tuesday, January 22, 2008
Implications of a Crash
An interesting and different article by Minxin Pei and Wayne Chen at Financial Times, "A crash is China’s chance for reforms". Most of the articles out there on China's stock markets examine the likelihood of a crash in China, or the probability of a lack of serious economic impact of a crash in China. The past two days have seen serious drops in the Chinese markets (see China financial markets for the details), and the question now seems to be not whether a crash is coming, but what the implications of the crash will be. Pei and Chen argue that a crash should be the impetus for the reform of the market by the central government in an effort to improve corporate governance.
Immediate suggested responses:
Immediate suggested responses:
- Resist bailing out investors
- Punish companies and individuals for illegal dealings by seizing "ill-gotten gains"
- Place seizures in fund to compensate legit investors
- Make this process transparent
- Allow autonomy in China Securities Regulatory Commission
- Decouple from Communist Party
- Appoint qualified and distinguished individuals, "including foreigners experienced in financial regulations," rather than making political appointments
- Curb protectionism in domestic financial securities
- State-owned brokerage firms dominate, and have previously been beset by corruption
- Allow foreign firms to enter as independents rather than as JVs
- Purpose: to restore stability and "create conditions for a future boom in equity investing"
- Increase financial products
- Expand institutional investing
Sunday, January 20, 2008
Posts of the Week: 1/13 - 1/20
Short descriptions... I must return to Championship Weekend.
More Myth Busting at China Hearsay
Stan Abrams illuminates ignorance.
Meet China's New M&A Policies. Same As The Old Policies. at China Law Blog
Dan Harris gives a concise summary of Steve Dickinson's summary on China's M&A policies.
China SMEs -- Own If You Want To Own at China Law Blog
Dan provides Jeremy Goldkorn's lessons for setting up a small business in China.
Patent Challenge in China: What's the State of the Art? at IP Dragon
IP Dragon writes about problems in determining the state of the prior art in China.
Windows TM Infringement? at China Hearsay
Stan on things to think about in TM infringement by way of a post at Brad Luo's China Business Law Blog.
Starting your own business in China–some additional comments. at Silk Road International Blog
David Dayton on starting a business in China, smoothly.
More Myth Busting at China Hearsay
Stan Abrams illuminates ignorance.
Meet China's New M&A Policies. Same As The Old Policies. at China Law Blog
Dan Harris gives a concise summary of Steve Dickinson's summary on China's M&A policies.
China SMEs -- Own If You Want To Own at China Law Blog
Dan provides Jeremy Goldkorn's lessons for setting up a small business in China.
Patent Challenge in China: What's the State of the Art? at IP Dragon
IP Dragon writes about problems in determining the state of the prior art in China.
Windows TM Infringement? at China Hearsay
Stan on things to think about in TM infringement by way of a post at Brad Luo's China Business Law Blog.
Starting your own business in China–some additional comments. at Silk Road International Blog
David Dayton on starting a business in China, smoothly.
Friday, January 18, 2008
Taking Depositions in China, Part the Last? Tale of the Deposition
Here is the story from 1989 of the only time the Chinese government allowed American attorneys to take the deposition of a Chinese witness. The story comes from the facts of Wang Zong Xiao v. Janet Reno, 837 F.Supp. 1506 (N.D. Cal. 1993). There are inconsistencies in the way the story was told, and for the sake of clarity I’m going to write up the simplest version of events. By the end of the story it should be quite clear why China has not allowed the deposition of a Chinese witness by Americans, since.
In January of 1988, Wang Zong Xiao met two men from Hong Kong, Ah Kun and Leung Tak Lun, in Guangzhou at the Oriental Hotel. Leung purchased 7 bricks of heroin (~4.5 kilograms) for 490,000 Hong Kong dollars. The ultimate destination of the heroin was San Francisco by way of Shanghai. Wang and Leung broke up the heroin into powder presumably to make smuggling easier. The plan was to bag up the heroin, stuff it inside of goldfish carcasses, and ship the drugs to San Francisco.
On March 8, 1988, the PRC notified the Narcotics Coordinator at American Embassy in Beijing, Jonathan Aloisi, that they had intercepted 4.5 kilograms of heroin bundled inside of dead goldfish. Aloisi called up the Brad Morgan, DEA agent in Hong Kong, who asked Aloisi if the Chinese would agree to a “controlled delivery of heroin.” In an unprecedented move, the Chinese authorities agreed to cooperate with the DEA in an international drug bust. A tracking device was placed inside of the shipment which arrived in San Francisco on May 10, 1988. Arrests were made in Hong Kong, the PRC, and San Francisco.
On March 12, 1988, “Four men approached Wang, kicked him, dragged him along in the street and into a waiting car; once in the car, Wang was blindfolded, kicked again, and sworn at by the arresting officers.” Wang was taken to the “No.1 Detention House” in Shanghai. Wang was interrogated for about 20 hours a day for a month, 5-6 days a week. Wang suffered severe verbal abuse, and, in addition to being awoken each morning by a cattle prod, physical and mental abuse similar to that at Guantanamo.
Over the Summer of 1988, American DEA agents, prosecutors, and embassy officials traveled to Shanghai and Beijing to meet with representatives of the PRC’s Ministry of Public Security (MPS), and interview the suspects and witnesses. The American agents were aware “that it would be unprecedented for the Chinese government to allow its own criminal defendants to travel to the United States to testify in an American criminal trial.” This did not stop the Americans from bringing this prospect up several times with representatives of the MPS. The MPS never said no, which the Americans admit greatly encouraged them. The Americans never let slip the one concern they had about bringing Chinese witnesses to the United States, the one concern they knew would derail their plans: that Wang would file suit to bar the U.S. from returning him to the PRC where he faced the death penalty, which would deprive him of the substantive due process of law that the U.S. Constitution would guarantee him if he testified in the U.S.
In September of 1989, the attorneys on both sides of Leung Tak Lun’s prosecution in the U.S. were given the go ahead to conduct discovery in China. For the first time, permission was given to take depositions of Chinese citizens after going through the proper diplomatic channels by submitting Letters Rogatory. The deposition was conditioned on a set of ground rules: the attorneys had to stick to the facts of the case, “avoid asking questions regarding any surrounding circumstances … [and they could not ask] any questions regarding the conditions of the witnesses’ custody or the voluntariness of their confessions.” The depositions went smoothly, and the Chinese government even agreed to allow Wang to travel to the United States for trial. This was an unprecedented level of cooperation between the PRC and the United States.
The case that these facts have come from, Wang Zong Xiao v. Reno, was Wang’s suit against the United States to force the government to keep him in the United States. Wang won, and was not returned to China. The PRC was not amused. In the first major instance of cooperation in a criminal investigation between the U.S. and PRC, the U.S. shortchanged the PRC in a major way. And the facts of the case show that the U.S. agents knew from the beginning that the PRC would get the short end of the deal and that the PRC would not be amused, yet they proceeded anyways. The PRC publicly announced that this level of cooperation should not be regarded as precedent, and that the U.S. should not expect to be conducting depositions in China anytime soon. 25+ years later and a second officially sanctioned deposition has yet to occur.
In January of 1988, Wang Zong Xiao met two men from Hong Kong, Ah Kun and Leung Tak Lun, in Guangzhou at the Oriental Hotel. Leung purchased 7 bricks of heroin (~4.5 kilograms) for 490,000 Hong Kong dollars. The ultimate destination of the heroin was San Francisco by way of Shanghai. Wang and Leung broke up the heroin into powder presumably to make smuggling easier. The plan was to bag up the heroin, stuff it inside of goldfish carcasses, and ship the drugs to San Francisco.
On March 8, 1988, the PRC notified the Narcotics Coordinator at American Embassy in Beijing, Jonathan Aloisi, that they had intercepted 4.5 kilograms of heroin bundled inside of dead goldfish. Aloisi called up the Brad Morgan, DEA agent in Hong Kong, who asked Aloisi if the Chinese would agree to a “controlled delivery of heroin.” In an unprecedented move, the Chinese authorities agreed to cooperate with the DEA in an international drug bust. A tracking device was placed inside of the shipment which arrived in San Francisco on May 10, 1988. Arrests were made in Hong Kong, the PRC, and San Francisco.
On March 12, 1988, “Four men approached Wang, kicked him, dragged him along in the street and into a waiting car; once in the car, Wang was blindfolded, kicked again, and sworn at by the arresting officers.” Wang was taken to the “No.1 Detention House” in Shanghai. Wang was interrogated for about 20 hours a day for a month, 5-6 days a week. Wang suffered severe verbal abuse, and, in addition to being awoken each morning by a cattle prod, physical and mental abuse similar to that at Guantanamo.
Over the Summer of 1988, American DEA agents, prosecutors, and embassy officials traveled to Shanghai and Beijing to meet with representatives of the PRC’s Ministry of Public Security (MPS), and interview the suspects and witnesses. The American agents were aware “that it would be unprecedented for the Chinese government to allow its own criminal defendants to travel to the United States to testify in an American criminal trial.” This did not stop the Americans from bringing this prospect up several times with representatives of the MPS. The MPS never said no, which the Americans admit greatly encouraged them. The Americans never let slip the one concern they had about bringing Chinese witnesses to the United States, the one concern they knew would derail their plans: that Wang would file suit to bar the U.S. from returning him to the PRC where he faced the death penalty, which would deprive him of the substantive due process of law that the U.S. Constitution would guarantee him if he testified in the U.S.
In September of 1989, the attorneys on both sides of Leung Tak Lun’s prosecution in the U.S. were given the go ahead to conduct discovery in China. For the first time, permission was given to take depositions of Chinese citizens after going through the proper diplomatic channels by submitting Letters Rogatory. The deposition was conditioned on a set of ground rules: the attorneys had to stick to the facts of the case, “avoid asking questions regarding any surrounding circumstances … [and they could not ask] any questions regarding the conditions of the witnesses’ custody or the voluntariness of their confessions.” The depositions went smoothly, and the Chinese government even agreed to allow Wang to travel to the United States for trial. This was an unprecedented level of cooperation between the PRC and the United States.
The case that these facts have come from, Wang Zong Xiao v. Reno, was Wang’s suit against the United States to force the government to keep him in the United States. Wang won, and was not returned to China. The PRC was not amused. In the first major instance of cooperation in a criminal investigation between the U.S. and PRC, the U.S. shortchanged the PRC in a major way. And the facts of the case show that the U.S. agents knew from the beginning that the PRC would get the short end of the deal and that the PRC would not be amused, yet they proceeded anyways. The PRC publicly announced that this level of cooperation should not be regarded as precedent, and that the U.S. should not expect to be conducting depositions in China anytime soon. 25+ years later and a second officially sanctioned deposition has yet to occur.
Thursday, January 17, 2008
Taking Depositions in China Part 3: Uncharted Waters
[The following is based upon a student comment in the University of Chicago Law Review. Recall that Mr. Zeidenberg read a law review article, followed the arguments, and ended up on the wrong side of a suit for copyright infringement. The stakes are even higher when it comes to placing yourself or your witness in danger of spending time in a Chinese prison. So, even though the following poses a possible exception to the inability to depose Chinese witnesses, I’d think that it would still be best to go through the proper diplomatic channels by submitting a letter rogatory.]
A possible exception to the inability to depose Chinese witnesses is presented in Matthew Tokson’s University of Chicago Law Review comment, “Virtual Confrontation: Is Videoconference Testimony By An Unavailable Witness Constitutional?” 74 U. Chi. L. Rev. 1581. Videoconference can be further defined as two-way video testimony where both sides can see, hear, and converse with each other. As U.S. law currently stands, there is a split between the Circuit Courts as to the constitutionality of two-way video testimony. The 11th Circuit has found that two-way videoconference violates the Confrontation Clause of the 6th Amendment of the Constitution, and the 2nd Circuit has found that two-way videoconference technology does not violate the Confrontation Clause. Tokson argues that two-way videoconference testimony and depositions should be constitutional to further the public policy of providing “reliable and crucial evidence at trial” in cases where foreign witnesses are the key to such crucial evidence.
In lengthy footnote 162, Tokson argues that deposition and testimony by two-way videoconferencing of willing Chinese witnesses would be a way to get around the required letter rogatory because the foreign officer issuing the oath would be located in America rather than in China. I can’t help but think that this advice is very dangerous for Chinese witnesses. Tokson is correct that China has concerns about foreigners administering oaths in China. But, Tokson misses the more crucial point that China likely has very real concerns about Chinese citizens swearing oaths to foreigners. If a Chinese citizen was caught swearing an oath to an officer of the U.S. in China, I can’t help but think that the Chinese citizen would face a more severe punishment than the officer. Why should the result be any different with regards to the officer’s location?
Lesson: Best not to play with technicalities in a young legal system when the freedom of your witness is at stake.
A possible exception to the inability to depose Chinese witnesses is presented in Matthew Tokson’s University of Chicago Law Review comment, “Virtual Confrontation: Is Videoconference Testimony By An Unavailable Witness Constitutional?” 74 U. Chi. L. Rev. 1581. Videoconference can be further defined as two-way video testimony where both sides can see, hear, and converse with each other. As U.S. law currently stands, there is a split between the Circuit Courts as to the constitutionality of two-way video testimony. The 11th Circuit has found that two-way videoconference violates the Confrontation Clause of the 6th Amendment of the Constitution, and the 2nd Circuit has found that two-way videoconference technology does not violate the Confrontation Clause. Tokson argues that two-way videoconference testimony and depositions should be constitutional to further the public policy of providing “reliable and crucial evidence at trial” in cases where foreign witnesses are the key to such crucial evidence.
In lengthy footnote 162, Tokson argues that deposition and testimony by two-way videoconferencing of willing Chinese witnesses would be a way to get around the required letter rogatory because the foreign officer issuing the oath would be located in America rather than in China. I can’t help but think that this advice is very dangerous for Chinese witnesses. Tokson is correct that China has concerns about foreigners administering oaths in China. But, Tokson misses the more crucial point that China likely has very real concerns about Chinese citizens swearing oaths to foreigners. If a Chinese citizen was caught swearing an oath to an officer of the U.S. in China, I can’t help but think that the Chinese citizen would face a more severe punishment than the officer. Why should the result be any different with regards to the officer’s location?
Lesson: Best not to play with technicalities in a young legal system when the freedom of your witness is at stake.
Wednesday, January 16, 2008
Taking Depositions in China Part 2: Just Do It
[Note: The purpose of the following is to show how to make sure that your opponent in litigation does not succeed in taking illegal depositions in China. By no means is this an endorsement of violating Chinese law.]
In Popular Imports v. Wong's International, 166 F.R.D. 276 (E.D.N.Y. 1996), Popular Imports was denied a motion to suppress eight depositions that were taken in China based on the theory that the depositions were taken illegally under Chinese law. "On June 7, 1995 Wong's served notices of deposition on eight non-party witnesses located in China." Two days later, Popular Imports objected to the depositions because of the burden in traveling to China. Popular Imports did not object at this time on the grounds that it was illegal to take depositions in China without a letter rogatory submitted through the proper diplomatic channels. The judge did not accept the objection and directed the parties to travel to China and take the deposition with a local Public Security Officer administering the oath. The lawyers traveled to China, hired a notary public, and took the depositions June 26-28, 1995. On September 8, 1995, Popular Imports challenged the legality of the depositions by alerting the court that the depositions were illegally taken under Chinese law, and a motion to suppress the illegally taken depositions followed.
Magistrate Judge Mann denied the motion to suppress. The U.S. District Court for the Eastern District of New York affirmed the decision of Judge Mann. Federal Rule of Civil Procedure 29 controls stipulations between the parties regarding depositions. The court held that, "where, as here, a party fails to raise issues of foreign illegality until after a deposition has been taken, that objection has been waived, the parties' Rule 29 stipulation controls, and the deposition 'may be used like other depositions.'"
The take away from all of this: If you don't want the other side to take depositions of Chinese witnesses, make sure that you object on the illegality of taking depositions without going through the proper diplomatic channels before the depositions are taken. Otherwise, your opponents are free to use these illegally taken depositions. All of the case law on this decision is positive.
In Popular Imports v. Wong's International, 166 F.R.D. 276 (E.D.N.Y. 1996), Popular Imports was denied a motion to suppress eight depositions that were taken in China based on the theory that the depositions were taken illegally under Chinese law. "On June 7, 1995 Wong's served notices of deposition on eight non-party witnesses located in China." Two days later, Popular Imports objected to the depositions because of the burden in traveling to China. Popular Imports did not object at this time on the grounds that it was illegal to take depositions in China without a letter rogatory submitted through the proper diplomatic channels. The judge did not accept the objection and directed the parties to travel to China and take the deposition with a local Public Security Officer administering the oath. The lawyers traveled to China, hired a notary public, and took the depositions June 26-28, 1995. On September 8, 1995, Popular Imports challenged the legality of the depositions by alerting the court that the depositions were illegally taken under Chinese law, and a motion to suppress the illegally taken depositions followed.
Magistrate Judge Mann denied the motion to suppress. The U.S. District Court for the Eastern District of New York affirmed the decision of Judge Mann. Federal Rule of Civil Procedure 29 controls stipulations between the parties regarding depositions. The court held that, "where, as here, a party fails to raise issues of foreign illegality until after a deposition has been taken, that objection has been waived, the parties' Rule 29 stipulation controls, and the deposition 'may be used like other depositions.'"
The take away from all of this: If you don't want the other side to take depositions of Chinese witnesses, make sure that you object on the illegality of taking depositions without going through the proper diplomatic channels before the depositions are taken. Otherwise, your opponents are free to use these illegally taken depositions. All of the case law on this decision is positive.
Tuesday, January 15, 2008
Taking Depositions in China Part 1: It Can Be Done
In theory.
Here's the scenario: you're a litigator preparing a case in the United States. You have reached the onerous task of discovery. A key witness is located in the PRC. You, or your adversary, need to take the Chinese witness's deposition. The witness is unable to come to the U.S., and their deposition must be taken in China. How do you go about taking this deposition, or preventing the other party from taking the deposition?
Two agreements, one bilateral and one international, govern this scenario. The earliest agreement is the U.S.-China Consular Convention of 1980. Article 27(1) of this Convention allows consular officers of either nation to take and witness statements and testimony for use in connection with a legal proceeding of either nation. China clarified this Convention in a series of diplomatic notes from the Chinese Ministry of Foreign Affairs to the US Embassy in Beijing. In Diplomatic Note No. 106 dated 6 November 1981, Diplomatic Note No. 88 dated 11 September, and Diplomatic Note No. 77 dated 11 September 1996, the Chinese government has stated that depositions under oath can only be taken by a US Consular official or foreign attorney if Beijing gives permission after receiving a letter rogatory through the proper diplomatic channels. The proper diplomatic channel is through the Bureau of International Judicial Assistance of the Ministry of Justice of the People's Republic of China. Beijing has only granted permission for a limited deposition once, in 1989 for a heroin smuggling criminal case in California District Court. And in connection with this permission, Beijing told the U.S. government that the grant of permission should not be construed as precedent.
The international agreement covering depositions is the Hague Conference on Private International Law Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, which China acceded to on 24 June 1998. In China's declaration of accession, they declared that they would not be bound by Articles 16-22 of Chapter II, and would only be bound by Article 15 of Chapter II. Article 15 allows voluntary depositions by consular officials, but only if granted permission by the Bureau of International Judicial Assistance of the Ministry of Justice of the People’s Republic of China. No depositions have been allowed under this Convention.
Only one limited deposition of a Chinese citizen in China has been allowed in 25+ years of China signing agreements allowing depositions to be taken. There is a very good reason for this. Depositions require the swearing of an oath. China has very strict laws regarding the administering and swearing of oaths. China likely regards the administering of oaths by foreign attorneys and consular officials as a "violation of China's judicial sovereignty." When foreign attorneys or consular officials administer an unauthorized oath in China, the penalties include arrest, detention, expulsion, or deportation of all participants in the oath. Even conducting a deposition in a hotel room with an oath by private persons could result in criminal penalties under Chinese law.
If you are involved in litigation and wish to take a deposition of a Chinese citizen, and you would mind having to sit in a Chinese prison, then you should probably seek permission from the Chinese authorities. If you are on the other side, and want to block the deposition of a Chinese citizen from being taken then you should raise an objection to the deposition as illegal under Chinese law, in a timely manner.
Over the next few days, I'm going to put up a few more posts on depositions in China. Two will be on exceptions to the inability to take depositions in China, one tried and true but illegal, another speculated upon in a law review article. Another post will tell the story of the one deposition that was allowed. The deposition involves all the good elements of a Hong Kong action flick: guns, drugs, and Janet Reno.
Most of the information in this post can be found at the U.S. Department of State. Their time lines and facts had to be cleared up a little. If I've got anything wrong, please let me know.
Here's the scenario: you're a litigator preparing a case in the United States. You have reached the onerous task of discovery. A key witness is located in the PRC. You, or your adversary, need to take the Chinese witness's deposition. The witness is unable to come to the U.S., and their deposition must be taken in China. How do you go about taking this deposition, or preventing the other party from taking the deposition?
Two agreements, one bilateral and one international, govern this scenario. The earliest agreement is the U.S.-China Consular Convention of 1980. Article 27(1) of this Convention allows consular officers of either nation to take and witness statements and testimony for use in connection with a legal proceeding of either nation. China clarified this Convention in a series of diplomatic notes from the Chinese Ministry of Foreign Affairs to the US Embassy in Beijing. In Diplomatic Note No. 106 dated 6 November 1981, Diplomatic Note No. 88 dated 11 September, and Diplomatic Note No. 77 dated 11 September 1996, the Chinese government has stated that depositions under oath can only be taken by a US Consular official or foreign attorney if Beijing gives permission after receiving a letter rogatory through the proper diplomatic channels. The proper diplomatic channel is through the Bureau of International Judicial Assistance of the Ministry of Justice of the People's Republic of China. Beijing has only granted permission for a limited deposition once, in 1989 for a heroin smuggling criminal case in California District Court. And in connection with this permission, Beijing told the U.S. government that the grant of permission should not be construed as precedent.
The international agreement covering depositions is the Hague Conference on Private International Law Convention on the Taking of Evidence Abroad in Civil or Commercial Matters, which China acceded to on 24 June 1998. In China's declaration of accession, they declared that they would not be bound by Articles 16-22 of Chapter II, and would only be bound by Article 15 of Chapter II. Article 15 allows voluntary depositions by consular officials, but only if granted permission by the Bureau of International Judicial Assistance of the Ministry of Justice of the People’s Republic of China. No depositions have been allowed under this Convention.
Only one limited deposition of a Chinese citizen in China has been allowed in 25+ years of China signing agreements allowing depositions to be taken. There is a very good reason for this. Depositions require the swearing of an oath. China has very strict laws regarding the administering and swearing of oaths. China likely regards the administering of oaths by foreign attorneys and consular officials as a "violation of China's judicial sovereignty." When foreign attorneys or consular officials administer an unauthorized oath in China, the penalties include arrest, detention, expulsion, or deportation of all participants in the oath. Even conducting a deposition in a hotel room with an oath by private persons could result in criminal penalties under Chinese law.
If you are involved in litigation and wish to take a deposition of a Chinese citizen, and you would mind having to sit in a Chinese prison, then you should probably seek permission from the Chinese authorities. If you are on the other side, and want to block the deposition of a Chinese citizen from being taken then you should raise an objection to the deposition as illegal under Chinese law, in a timely manner.
Over the next few days, I'm going to put up a few more posts on depositions in China. Two will be on exceptions to the inability to take depositions in China, one tried and true but illegal, another speculated upon in a law review article. Another post will tell the story of the one deposition that was allowed. The deposition involves all the good elements of a Hong Kong action flick: guns, drugs, and Janet Reno.
Most of the information in this post can be found at the U.S. Department of State. Their time lines and facts had to be cleared up a little. If I've got anything wrong, please let me know.
Monday, January 14, 2008
No China Mobile for Apple
After over a month of rumors, China Mobile's spokesperson confirmed on Monday that China Mobile and Apple were no longer negotiating for an iPhone contract, as reported by Wired Blog Network. It is suspected that Apple was demanding too large of a share of revenue and China Mobile, with over 300 million subscribers, was unwilling to concede to this arrangement. Wired suggests that Apple will now turn to China Unicom which has a lower market share and will probably be more willing to accede to Apple's steep demands.
The news didn't hurt Apple's stock. They finished the day up 3.53%.
The news didn't hurt Apple's stock. They finished the day up 3.53%.
Saturday, January 12, 2008
Posts of the Week: 1/06 - 1/12
This was my first week back at school, and the second draft of my comment is due in a couple of days. Fortunately, there were a lot of good posts to distract me on China law and business this past week. I also spent some time clearing up and streamlining my feed issues. Big thanks to Fili from Chinalyst for excellent help in getting my feed issues fixed. Chinalyst is a great aggregator for my purposes and they are very helpful. My feed should stay the same for the foreseeable future.
Top ten legal news stories of 2007 at China Law Prof Blog
A rundown on the list of the top ten legal stories of 2007 as compiled by a few Chinese media companies.
Chinese Takeaway -- Protection From Bad Product at China Law Blog
Dan Harris summarizes an article on what US distributors can do to minimize liability on products sourced from China.
Inside the music business in China at Danwei
Lengthy rundown on the music business in China by Ed Peto.
Who Needs International/Foreign Law? Not Us, We're Americans. at China Law Blog
Dan Harris on the hesitancy of American courts to apply international law. Also, checkout responses at Transnational Law Blog and China Hearsay.
Migrant Workers Self Help: Extreme Edition at China Business Law Blog
Brad Luo on the [in]ability of the Chinese poor in using the legal system to address injustice. Also, check out the response at China Law Blog.
Starbucks Changes Tactics in China at International Business Development
In his new blog, Aaron Daniels examines how Starbucks is making adjustments inits image to compete even better in China.
Pragmatic Marketing In The Chinese Online Gaming Sector at Managing the Dragon
Sean writes about how Microsoft might be able to increase revenue in China by relaxing [!?] anti-piracy controls.
Big Brands and Counterfeits at China Hearsay
IP Lawyer Trooper Stan Abrams gives the lowdown on the tried and true solution to IP abuse: "Effective enforcement, both civil and criminal."
Wanted: More analysts and wider analysis at China Economic Review
Tim Burroughs argues that China's domestic A-share market needs more analysis to expose both the "new investment opportunities" and the "turkeys" of the small and under analyzed firms.
Zero2IPO Starts VC-PE Database at China Venture News
Greg Cruey links to a new China venture capital and private equity database. Seems like some use could one day be made out of this subscription database.
China Releases White Paper on Energy at All Roads Lead to China
Rich Brubaker discusses the key points of the White Paper.
Service Of Process in China... eeh People's Republic of China at IP Dragon
IP Dragon reminds us of China's name.
Top ten legal news stories of 2007 at China Law Prof Blog
A rundown on the list of the top ten legal stories of 2007 as compiled by a few Chinese media companies.
Chinese Takeaway -- Protection From Bad Product at China Law Blog
Dan Harris summarizes an article on what US distributors can do to minimize liability on products sourced from China.
Inside the music business in China at Danwei
Lengthy rundown on the music business in China by Ed Peto.
Who Needs International/Foreign Law? Not Us, We're Americans. at China Law Blog
Dan Harris on the hesitancy of American courts to apply international law. Also, checkout responses at Transnational Law Blog and China Hearsay.
Migrant Workers Self Help: Extreme Edition at China Business Law Blog
Brad Luo on the [in]ability of the Chinese poor in using the legal system to address injustice. Also, check out the response at China Law Blog.
Starbucks Changes Tactics in China at International Business Development
In his new blog, Aaron Daniels examines how Starbucks is making adjustments inits image to compete even better in China.
Pragmatic Marketing In The Chinese Online Gaming Sector at Managing the Dragon
Sean writes about how Microsoft might be able to increase revenue in China by relaxing [!?] anti-piracy controls.
Big Brands and Counterfeits at China Hearsay
IP Lawyer Trooper Stan Abrams gives the lowdown on the tried and true solution to IP abuse: "Effective enforcement, both civil and criminal."
Wanted: More analysts and wider analysis at China Economic Review
Tim Burroughs argues that China's domestic A-share market needs more analysis to expose both the "new investment opportunities" and the "turkeys" of the small and under analyzed firms.
Zero2IPO Starts VC-PE Database at China Venture News
Greg Cruey links to a new China venture capital and private equity database. Seems like some use could one day be made out of this subscription database.
China Releases White Paper on Energy at All Roads Lead to China
Rich Brubaker discusses the key points of the White Paper.
Service Of Process in China... eeh People's Republic of China at IP Dragon
IP Dragon reminds us of China's name.
Friday, January 11, 2008
Emerging Market Big Boys
The latest issue of the Economist contains an interesting (and apparently free online) article on the powerful multinational companies that have grown up in emerging economies. Thanks to these companies, foreign direct investment (FDI) from the developing world has increased from 5% of total FDI in 1990 to 14% of the world's total FDI in 2006.
The companies from China to keep an eye on:
The Economist points out five successful strategies that these multinationals have used:
The companies from China to keep an eye on:
- BYD, battery maker
- Chery Automobile, China's largest automobile exporter
- Embraer and China Aviation Industry Corporation II (AVIC II) (no English site, yet), joint venture in regional jet manufacture
- Hisense, consumer-electronics group
- Johnson Electric, miniature electric motor manufacturer
- Lenovo, computer manufacturer
- TCL (no English site, yet), consumer-electronics company
- "Rapid growth gives companies scale and spare cash to invest abroad."
- "Costs are low."
- "The difficulties of operating in an emerging market may make managers adaptable and resilient."
- "Gradual liberation in their home markets ... has exposed them to [healthy] competition from multinationals."
- Family ownership/control, even when public, is more common and allows decisions to be made more quickly.
- State banks offer them cheap financing.
- The world economy is already into advanced stages of globalisation.
- The multinationals from the rich nations matured at a time when companies were able to grow at a slower pace.
- Tariffs and other regulations can prevent companies from emerging markets to enter the developed markets.
- "Firms may be ignorant of the markets they are entering."
- Well established brands in the emerging world are often unknown abroad.
- Management talent may be lacking.
- Pay structures are difficult given wage expectations in the developed world.
The Economist points out five successful strategies that these multinationals have used:
- Taking successful local brands global, as accomplished by Hisense in Africa, Eastern Europe, and the Middle East.
- "Turn local engineering excellence into innovation on a global scale," as is being done in the joint venture between Brazilian firm Embraer and AVIC II.
- "Global leadership in a narrow product category," as done by BYD and Johnson Electric, and I'd add Nine Dragons Paper to this category.
- "Taking advantage of natural resources at home, and boosting them with first-class marketing and distribution." Labor seems to be China's greatest natural resource, but I can't think of a homegrown multinational that fits the bill. The magazine offers the examples of Brazil's Sadia (frozen foods), Perdigão (frozen foods, and making a name for itself in the '70s by adhering to Islamic law in the slaughter of chickens), and Vale (iron).
- "Have a new or better business model to roll out to many different markets." The magazine offers Mexico's Cemex and their "rigorous development of its own style of managing acquisitions."
Wednesday, January 9, 2008
James Fallows Poses a Valuable Question
James Fallows's most recent article on China appeared today in the Atlantic, and the Atlantic was kind enough to post the entire article free of charge at their website. The $1.4 Trillion Question examines many aspects of the, um, large amount of dollar reserves the Chinese government has amassed over the years. The one problem that I find with the article is that it is more technical than usual. But, forex reserves are a technical issue and I just caution readers that there are many facets. And, Mr. Fallows seems to think that there is one solution: prudence. We see this theme working in the background of Mr. Fallows's earlier China pieces for the Atlantic, but this article brings the theme to the foreground and shows us why China is an issue worthy of deep thinking by our policy-makers and -implementers.
One of the themes of my blog has been that there are more grays than black or whites operating in the U.S. relationship with China, and if our policy-makers don't stop relegating China to sound bites, another Cold War is not far off. The Sword of Damocles this time around is not mutually assured physical destruction, but mutually assured economic destruction. And we really really like our expensive toys. It is time we start understanding China.
Mr. Fallows has spent way too much time studying Strunk and White (but that's a good thing), and his sentences are so packed with meaning that any treatment but a simple reprinting would do disservice to the prose. Here are several selected passages that I think give a nice overview and framework of Mr. Fallows's piece. But please, read the whole article, too.
For the final and most important paragraph, you're going to either need to go buy the issue yourself or head on over to the site and read the free article.
If I didn't think this article was so important, I think I'd be embarrassed by how much of it I just reprinted above. But it is, and I'm not.
On another note, it was a (nice) surprise to see a humor page back in the Atlantic (though apparently only for subscribers). I thought they had rid the Atlantic of humor? Or maybe this one is cynical enough to be devoid of humor?
One of the themes of my blog has been that there are more grays than black or whites operating in the U.S. relationship with China, and if our policy-makers don't stop relegating China to sound bites, another Cold War is not far off. The Sword of Damocles this time around is not mutually assured physical destruction, but mutually assured economic destruction. And we really really like our expensive toys. It is time we start understanding China.
Mr. Fallows has spent way too much time studying Strunk and White (but that's a good thing), and his sentences are so packed with meaning that any treatment but a simple reprinting would do disservice to the prose. Here are several selected passages that I think give a nice overview and framework of Mr. Fallows's piece. But please, read the whole article, too.
Like so many imbalances in economics, this one can’t go on indefinitely, and therefore won’t. But the way it ends—suddenly versus gradually, for predictable reasons versus during a panic—will make an enormous difference to the U.S. and Chinese economies over the next few years, to say nothing of bystanders in Europe and elsewhere.
Any economist will say that Americans have been living better than they should—which is by definition the case when a nation’s total consumption is greater than its total production, as America’s now is. Economists will also point out that, despite the glitter of China’s big cities and the rise of its billionaire class, China’s people have been living far worse than they could. That’s what it means when a nation consumes only half of what it produces, as China does...
In the past six months, relative nobodies in China’s establishment were able to cause brief panics in the foreign-exchange markets merely by hinting that China might stop supplying so much money to the United States....
Americans sometimes debate (though not often) whether in principle it is good to rely so heavily on money controlled by a foreign government. The debate has never been more relevant, because America has never before been so deeply in debt to one country. Meanwhile, the Chinese are having a debate of their own—about whether the deal makes sense for them....
The average cash income for workers in a big factory is about $160 per month. On the farm, it’s a small fraction of that. Most people in China feel they are moving up, but from a very low starting point...
China’s savings rate is a staggering 50 percent, which is probably unprecedented in any country in peacetime. This doesn’t mean that the average family is saving half of its earnings—though the personal savings rate in China is also very high. Much of China’s national income is “saved” almost invisibly and kept in the form of foreign assets. Until now, most Chinese have willingly put up with this, because the economy has been growing so fast that even a suppressed level of consumption makes most people richer year by year...
The government doesn’t want to let the market set the value of the RMB, because it thinks that would disrupt the constant growth and the course it has carefully and expensively set for the factory-export economy. In the short run, it worries that the RMB’s value against the dollar and the euro would soar, pricing some factories in “expensive” places such as Shanghai out of business. In the long run, it views an unstable currency as a nuisance in itself, since currency fluctuation makes everything about business with the outside world more complicated. Companies have a harder time predicting overseas revenues, negotiating contracts, luring foreign investors, or predicting the costs of fuel, component parts, and other imported goods.
And the government doesn’t want to increase domestic spending dramatically, because it fears that improving average living conditions could paradoxically intensify the rich-poor tensions that are China’s major social problem...
This is the bargain China has made—rather, the one its leaders have imposed on its people. They’ll keep creating new factory jobs, and thus reduce China’s own social tensions and create opportunities for its rural poor. The Chinese will live better year by year, though not as well as they could. And they’ll be protected from the risk of potentially catastrophic hyperinflation, which might undo what the nation’s decades of growth have built. In exchange, the government will hold much of the nation’s wealth in paper assets in the United States, thereby preventing a run on the dollar, shoring up relations between China and America, and sluicing enough cash back into Americans’ hands to let the spending go on...
The public is beginning to behave like the demanding client of an investment adviser: it wants better returns, with fewer risks...
The unfair reason is all-purpose nervousness about any new rising power. “They need to understand, and they don’t, that everything they do will be seen as political,” a financier with extensive experience in both China and America told me. “Whatever they buy, whatever they say, whatever they do will be seen as China Inc.”...
China can’t afford to stop feeding dollars to Americans, because China’s own dollar holdings would be devastated if it did. As long as that logic holds, the system works. As soon as it doesn’t, we have a big problem...
As many world tragedies have been caused by miscalculation as by malice...
With a lack of tragic imagination, Americans have drifted into an arrangement that is comfortable while it lasts, and could last for a while more. But not much longer...
For the final and most important paragraph, you're going to either need to go buy the issue yourself or head on over to the site and read the free article.
If I didn't think this article was so important, I think I'd be embarrassed by how much of it I just reprinted above. But it is, and I'm not.
On another note, it was a (nice) surprise to see a humor page back in the Atlantic (though apparently only for subscribers). I thought they had rid the Atlantic of humor? Or maybe this one is cynical enough to be devoid of humor?
Monday, January 7, 2008
Corruption Reporting: Shanghai Daily Style
Maybe I was just suckered in by the fanciful title, but I had a great time reading Sword of Sunshine Slays Dragon of Corruption by Wang Yong, Opinion Editor at Shanghai Daily. Wang Yong's thesis is that transparency and the truth that comes from public debate can serve as an important check on corruption by bringing the corruption into the sunshine.
Wang Yong sees the biggest problem to be that Chinese officials often cover for each other and work hand in hand, allowing officials with a history of corruption to continue in their official capacity and climb the ranks of officialdom.
I must admit, I am confused by a major part of Wang Yong's opinion piece. A large part of the opinion is about the success of public opposition to "a polluting billion-dollar chemical project." Several people were arrested, and some were detained for almost two months. One man for failing to acquire a permit before protesting, and another for organizing a street walk over the internet. One man, somewhat incredulous at being detained for sending messages on the internet, was "soothingly" told by a police officer, "Don't cry, young fellow, history will tell." Is Wang Yong arguing that detention is a small price to pay for "a public veto of, or a check against, a harmful project favored by the local government"? Is Wang Yong suggesting that if you plan spreading the sunshine, follow the rules and regs? Or, is Wang Yong shedding sunlight on rules and regulations that are blocking the people's ability to wield the Sword of Sunshine?
Reprinted below is the sidebar from the article which chronicles the lives of several corrupt Chinese officials who continued to be promoted [links courtesy of me]. The more intense the sun shines upon corruption, the more difficult it is for corruption to hide:
Wang Yong sees the biggest problem to be that Chinese officials often cover for each other and work hand in hand, allowing officials with a history of corruption to continue in their official capacity and climb the ranks of officialdom.
I must admit, I am confused by a major part of Wang Yong's opinion piece. A large part of the opinion is about the success of public opposition to "a polluting billion-dollar chemical project." Several people were arrested, and some were detained for almost two months. One man for failing to acquire a permit before protesting, and another for organizing a street walk over the internet. One man, somewhat incredulous at being detained for sending messages on the internet, was "soothingly" told by a police officer, "Don't cry, young fellow, history will tell." Is Wang Yong arguing that detention is a small price to pay for "a public veto of, or a check against, a harmful project favored by the local government"? Is Wang Yong suggesting that if you plan spreading the sunshine, follow the rules and regs? Or, is Wang Yong shedding sunlight on rules and regulations that are blocking the people's ability to wield the Sword of Sunshine?
Reprinted below is the sidebar from the article which chronicles the lives of several corrupt Chinese officials who continued to be promoted [links courtesy of me]. The more intense the sun shines upon corruption, the more difficult it is for corruption to hide:
Corrupt figures promoted
1. Chen Liangyu, former Party chief of Shanghai.
He had a corrupt record since 1987 when he was director and deputy Party chief of Huangpu District.
However, he was promoted to be Shanghai's Party chief. He received Party disciplinary punishment in 2006. Now he is under judicial investigation.
2. Qin Yu, former secretary to Chen Liangyu and director of Baoshan District, Shanghai.
He received about 6.8 million yuan (US$870,000) in bribes between 1998 and 2006, yet he was promoted to be director of Baoshan District in 2006.
He was put under Party disciplinary investigation one month after his promotion. Last month, Qin got a final court verdict: life in prison.
3. Han Guozhang, former vice-president of Shanghai Electric Group.
He received bribes before he was to be promoted to be the deputy Party chief and executive vice-president of the group on August 4, 2007. He was put under Party disciplinary investigation two days later. On September 23, a court sentenced him to life in prison for having taken bribes worth more than 6 million yuan.
4. Pang Jiayu, former vice-chairman of the People's Political Consultative Conference in Shaanxi Province.
He was found to be corrupt ever since 1997. Despite public complaints, he was promoted in 2003 from the chairman of the People's Congress of Baoji City to his last position. He is now under judicial investigation.
5. Hu Xing, former deputy director of the department of communications, Yunnan Province.
He kept mistresses and took bribes worth more than 40 million yuan between 1995 and 2004, and yet he was promoted. He was sentenced to life in prison last year.
6. Duan Yihe, former chairman of the People's Congress of Jinan City, Shandong Province.
He was found by his supervisors to keep a mistress in 1994, but he was then promoted to be deputy Party secretary of Jinan in 1997 and further to be chairman of the municipal people's congress in 2001.
Last July, he had his demanding mistress murdered. He was executed in September.
7. He Minxu, former vice-governor of Anhui Province.
He took bribes worth about 8.4 million yuan from 1991 to 2006. He also spent lavishly on mistresses and prostitutes. He became Anhui's deputy governor in 2005, and was subject to Party disciplinary investigation last June.
Saturday, January 5, 2008
Posts of the Week: 12/30 - 1/05
My money is on next week being the week that returns to normal...
Let's begin with a crank post, and then into the real stuff.
Yossi Vardi: The "dangers" of blogging at TED Talks
Israeli tech start-up entrepreneur Yossi Vardi discusses the dangers of blogging in this recently posted TED Talk. Also, Vardi is featured in this week's Economist.
A couple of posts on the new online video rules:
at RConversation
at Danwei
Internet Copyright Law 2006 Difference Between Winning (Baidu) And Losing (Yahoo China)? at IP Dragon
Interesting look at why these similar cases came out differently.
The New Trend in China—Official Non-Enforcement. at Silk Road International Blog
It might be the trend, but be wary of advisers who tell you there is no need to follow the law closely.
China Traffic Laws As Government Policy Writ Large. Channeling Benjamin Cardozo at China Law Blog
What can I say? I'm a sucker for this stuff. Also, if you can't enough, check out a later California case, Haft v. Lone Palm Hotel, where a man and his son drowned in a motel swimming pool and there was neither sign nor lifeguard. The court created an even stricter burden of proof creating strict liability in this situation by forcing the motel to prove that the lack of lifeguards was not causally related to the drownings.
Let's begin with a crank post, and then into the real stuff.
Yossi Vardi: The "dangers" of blogging at TED Talks
Israeli tech start-up entrepreneur Yossi Vardi discusses the dangers of blogging in this recently posted TED Talk. Also, Vardi is featured in this week's Economist.
A couple of posts on the new online video rules:
at RConversation
at Danwei
Internet Copyright Law 2006 Difference Between Winning (Baidu) And Losing (Yahoo China)? at IP Dragon
Interesting look at why these similar cases came out differently.
The New Trend in China—Official Non-Enforcement. at Silk Road International Blog
It might be the trend, but be wary of advisers who tell you there is no need to follow the law closely.
China Traffic Laws As Government Policy Writ Large. Channeling Benjamin Cardozo at China Law Blog
What can I say? I'm a sucker for this stuff. Also, if you can't enough, check out a later California case, Haft v. Lone Palm Hotel, where a man and his son drowned in a motel swimming pool and there was neither sign nor lifeguard. The court created an even stricter burden of proof creating strict liability in this situation by forcing the motel to prove that the lack of lifeguards was not causally related to the drownings.
Uncertainty is Bad For Business
China has taken a lot of heat from just about every imaginable source on the IP violations that are allowed/tolerated/improperly policed/enforced (pick your poison). Beijing is trying its darndest to fix this problem, or perceived problem as the case may be. But a recent decision by the Chinese courts is a big mistake.
A few weeks ago on 20 December 2007, Yahoo lost a law suit filed by the International Federation of Phonographic Industries (IFPI) for linking to web sites that hosted pirated music recordings. An Associated Press article, and a post at IP Dragon provide more background on this situation. The problem is that the standard that the Chinese courts are holding Yahoo to is way too high. Holding Yahoo liable for these deep links discourages the development of strong search engines by disincentivizing search technology that searches too well. This problem is compounded by Baidu winning a similar law suit filed by the IFPI.
If different results are being reached by the courts on almost identical facts (and we're assuming no secondary factors such as Party influence), then the courts are creating uncertainty for search engine operators in knowing whether they are violating the law. United States constitutional law questions tend to deal with uncertainty in a very particular way. When the current law makes both constitutionally protected and unprotected acts illegal, and it is unclear when one's conduct goes from constitutionally protected to unprotected, then the whole law is deemed unconstitutional because the courts are more afraid that the law will have a "chilling effect" upon the citizen's willingness to engage in constitutionally protected activities than they are afraid that citizens will engage in illegal and unprotected acts. This same effect applies to business. Innovation will be stifled because search engines will be afraid that their algorithms are linking to copyrighted material, and there will be little reason to make more powerful search engines.
It is not too much of a secret that I'm a fan of DMCA style Safe Harbors for Online Service Providers (OSPs). Reprinted below is my comment from Duncan Bucknell's IP ThinkTank blog:
If the Chinese government adopted a safe harbor provision similar to the DMCA, then they would be able to kill two birds with one arrow (一箭双雕）. First, they would eliminate uncertainty by creating a law that clearly tells OSPs when they are not liable for what they may be linking to. Secondly, impediments to the growth of e-commerce in China, which Jack Ma predicts will see incredible growth in 2008, would be lessened.
I'm going to avoid commenting on the other important copyright and internet issue because it was covered so well by Rebecca MacKinnon at RConversation (h/t China Law Blog). But I will say that I think All Roads Lead to China has the most concise post on the problem.
A few weeks ago on 20 December 2007, Yahoo lost a law suit filed by the International Federation of Phonographic Industries (IFPI) for linking to web sites that hosted pirated music recordings. An Associated Press article, and a post at IP Dragon provide more background on this situation. The problem is that the standard that the Chinese courts are holding Yahoo to is way too high. Holding Yahoo liable for these deep links discourages the development of strong search engines by disincentivizing search technology that searches too well. This problem is compounded by Baidu winning a similar law suit filed by the IFPI.
If different results are being reached by the courts on almost identical facts (and we're assuming no secondary factors such as Party influence), then the courts are creating uncertainty for search engine operators in knowing whether they are violating the law. United States constitutional law questions tend to deal with uncertainty in a very particular way. When the current law makes both constitutionally protected and unprotected acts illegal, and it is unclear when one's conduct goes from constitutionally protected to unprotected, then the whole law is deemed unconstitutional because the courts are more afraid that the law will have a "chilling effect" upon the citizen's willingness to engage in constitutionally protected activities than they are afraid that citizens will engage in illegal and unprotected acts. This same effect applies to business. Innovation will be stifled because search engines will be afraid that their algorithms are linking to copyrighted material, and there will be little reason to make more powerful search engines.
It is not too much of a secret that I'm a fan of DMCA style Safe Harbors for Online Service Providers (OSPs). Reprinted below is my comment from Duncan Bucknell's IP ThinkTank blog:
Come, come to the United States. We will welcome you with open arms. We will grant a safe harbor under DMCA Copyright Act Sec. 512 to any ISP that:Can you take a guess at the identity of one of the strongest lobbyists for this safe harbor provision? Yep, that's it, Yahoo! Yahoo pushed this legislation to prevent the exact type of lawsuit in the U.S. that they just lost against IFPI in China. And, what was the winning argument that sold (or is it bought?) so many of our legislators? "Failure to incorporate immunity directly into the Copyright Act could severely impair their rapidly emerging industry and impede the growth of economic activity on the Internet" (from Merges, Menell, & Lemley's IP Survey textbook).
1. Adopts, implements, and informs its subscribers of its policy for terminating service to users who are repeat copyright infringers;
2. Adopts standard technical measures used by copyright owners to identify and protect copyrighted works; and
3. Designates an agent to receive notification of claimed infringements from copyright owners, and registers that agent with the Copyright Office.
Basically, if you're willing to give up your customers, and you don't review anything we'll let you walk!
There are two different types of ISPs:
1. "an entity offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user, of material of the user's choosing, without modification to the content of the material as sent or received."
2. any "provider of online services or network access, or the operator of facilities therefor."
As long as it acts as passive conduit, ISPs falling under definition 1 have a safe harbor against transmission and transient storage of copyrighted works.
ISPs falling under definition 1 & 2, have a safe harbor for system caching, storing materials for users, and for information location tools. For these 3 safe harbors, the ISP must not know or have reason to know that the material cached, stored, or located is infringing.
If the Chinese government adopted a safe harbor provision similar to the DMCA, then they would be able to kill two birds with one arrow (一箭双雕）. First, they would eliminate uncertainty by creating a law that clearly tells OSPs when they are not liable for what they may be linking to. Secondly, impediments to the growth of e-commerce in China, which Jack Ma predicts will see incredible growth in 2008, would be lessened.
I'm going to avoid commenting on the other important copyright and internet issue because it was covered so well by Rebecca MacKinnon at RConversation (h/t China Law Blog). But I will say that I think All Roads Lead to China has the most concise post on the problem.
Thursday, January 3, 2008
Caucus Time in Iowa
Giddy Up!
I don't know about the rest of you, but this is the most exciting primary election of my politically conscious life.
1992 might be going back a little too far for me, but the Republicans had an incumbent in George H.W. Bush, and he waged his campaign like his election was a foregone conclusion. Sure, Ross Perot made things interesting in a crazy "What's he going to say next?" sense, but not in a "Who's going to be our next leader?" sense. This took a lot of the excitement from the Democrats until saxophone playing Bill Clinton slid into office. The early years were rough, but by 1996, and the next election cycle, the US was entering one of the most prosperous periods in history.
With a popular and charismatic incumbent for the Democrats, the Republicans fielded one of the most boring candidates imaginable in Bob Dole, Viagra commercial aside (unfortunately that spot seems to have been excised from the internet, so we're going to have to go with the companion piece, Britney Spears' Pepsi Superbowl Commercial). Yes, Mr. Dole and his wife are incredibly successful politicians, but hardly inspiring presidential material.
2000. After President Clinton's success, Oval Office hijinks aside, Al Gore was the clear Democrat choice, and the Republicans didn't field anybody terribly interesting. Voter boredom in 2000 was evidenced by the extremely low voter turnout. So low, that nobody really raised a
ruckus over whomever the Court decided was President.
With an incumbent in the middle of a war, 2004 was another boring presidential election year. The only truly interesting bit was the new depths attack ads reached in rewriting John Kerry's war record. He really was a war hero. But, he was also a flip-flopper.
But 2008? Whoa Nelly! We've got a showdown between a woman, a black man and a trial lawyer on one side, and a standoff between a Baptist minister, a Mormon, THE Mayor of New York City, a torturee and a strict constitutionalist on the other. And before this thing is out, there is an off chance that an Academy Award Winner and some other New York City Mayor might join the race. Yes, it's unfair to boil these candidates down to stereotypes, but it makes identifying them easier, and it pushes the candidates to the background.
America is at a pivotal juncture. The winner of this election will be faced with many known, and certainly some unknown, decisions that will guide American policy for some time. The next President is going to have to seriously address a new solution for Iraq, global climate change, the rise of China, domestic healthcare, and whatever the hell is happening (dangerous ideologies [fundamentalist Islam and/or tribalism] combined with too many guns and valuable natural resources, including poppy cultivation) in Africa and Afghanistan/Pakistan the past few weeks.
With the fall of the Soviet Union, Francis Fukuyama wrote something he has later recanted, that the future of the world is one that would be dominated by the US, democracy and capitalism, and that the world would fall under the peaceful order of the US. Rather than the "End of History," the world is returning to "History As Usual," characterized by conflicts and issues much more nuanced, gray, and difficult than the simple US v. Them of the Cold War.
The next President of the United States must deal with history as usual more than any other President of the Post-WW2 era. I wish that I could grab the collective electorate, shake them and say, "It doesn't matter if a Mexican is washing your dishes, and dammit, you're healthy enough, and please, don't even get me started on the importance of gay marriage! The future of the world is in the balance and if America elects another consensus destroyer, the American vision of Hope and Freedom will become much, much more difficult to spread. Hope and Freedom are the virtues that our soldiers have given their life for, and if we lose the ability to spread Hope and Freedom, then every single American life lost in combat and every single casualty from the other side in our conflicts becomes a life given and taken in vain. It is time that the American people make a sacrifice. If it means sacrificing some of our domestic concerns over choosing the candidate that can best raise our standing in the world, then we must sacrifice. The greatest part about America is her hope and freedom, and if we lose the ability to spread hope and freedom to the world we have committed a crime against the world."
That said, I'm all for the black guy who attended an Islamic school, admitted to using drugs, didn't have the opportunity to vote for the war, and, even though I'm not religious, is the most genuine candidate when it comes to his religion. Plus, he doesn't seem scared of anybody or anything, unlike all the other candidates who seem to be itching for the chance to show just how tough they can be.
-----NOTE-----
This is not the tone I originally intended for this post... I was going to write about Xinhua's primary coverage and how everybody seems to be excited by this Primary, but I got carried away. That said, Xinhua's coverage on the English page is pretty boring, but you get lots of fun stuff in the Chinese section. They're pretty sure that China's going to be an easy target for all of the candidates, and while playing the "Crying Card" can be good for US Presidential Candidates, it is not recommended for female US Presidential Candidates.
I don't know about the rest of you, but this is the most exciting primary election of my politically conscious life.
1992 might be going back a little too far for me, but the Republicans had an incumbent in George H.W. Bush, and he waged his campaign like his election was a foregone conclusion. Sure, Ross Perot made things interesting in a crazy "What's he going to say next?" sense, but not in a "Who's going to be our next leader?" sense. This took a lot of the excitement from the Democrats until saxophone playing Bill Clinton slid into office. The early years were rough, but by 1996, and the next election cycle, the US was entering one of the most prosperous periods in history.
With a popular and charismatic incumbent for the Democrats, the Republicans fielded one of the most boring candidates imaginable in Bob Dole, Viagra commercial aside (unfortunately that spot seems to have been excised from the internet, so we're going to have to go with the companion piece, Britney Spears' Pepsi Superbowl Commercial). Yes, Mr. Dole and his wife are incredibly successful politicians, but hardly inspiring presidential material.
2000. After President Clinton's success, Oval Office hijinks aside, Al Gore was the clear Democrat choice, and the Republicans didn't field anybody terribly interesting. Voter boredom in 2000 was evidenced by the extremely low voter turnout. So low, that nobody really raised a
ruckus over whomever the Court decided was President.
With an incumbent in the middle of a war, 2004 was another boring presidential election year. The only truly interesting bit was the new depths attack ads reached in rewriting John Kerry's war record. He really was a war hero. But, he was also a flip-flopper.
But 2008? Whoa Nelly! We've got a showdown between a woman, a black man and a trial lawyer on one side, and a standoff between a Baptist minister, a Mormon, THE Mayor of New York City, a torturee and a strict constitutionalist on the other. And before this thing is out, there is an off chance that an Academy Award Winner and some other New York City Mayor might join the race. Yes, it's unfair to boil these candidates down to stereotypes, but it makes identifying them easier, and it pushes the candidates to the background.
America is at a pivotal juncture. The winner of this election will be faced with many known, and certainly some unknown, decisions that will guide American policy for some time. The next President is going to have to seriously address a new solution for Iraq, global climate change, the rise of China, domestic healthcare, and whatever the hell is happening (dangerous ideologies [fundamentalist Islam and/or tribalism] combined with too many guns and valuable natural resources, including poppy cultivation) in Africa and Afghanistan/Pakistan the past few weeks.
With the fall of the Soviet Union, Francis Fukuyama wrote something he has later recanted, that the future of the world is one that would be dominated by the US, democracy and capitalism, and that the world would fall under the peaceful order of the US. Rather than the "End of History," the world is returning to "History As Usual," characterized by conflicts and issues much more nuanced, gray, and difficult than the simple US v. Them of the Cold War.
The next President of the United States must deal with history as usual more than any other President of the Post-WW2 era. I wish that I could grab the collective electorate, shake them and say, "It doesn't matter if a Mexican is washing your dishes, and dammit, you're healthy enough, and please, don't even get me started on the importance of gay marriage! The future of the world is in the balance and if America elects another consensus destroyer, the American vision of Hope and Freedom will become much, much more difficult to spread. Hope and Freedom are the virtues that our soldiers have given their life for, and if we lose the ability to spread Hope and Freedom, then every single American life lost in combat and every single casualty from the other side in our conflicts becomes a life given and taken in vain. It is time that the American people make a sacrifice. If it means sacrificing some of our domestic concerns over choosing the candidate that can best raise our standing in the world, then we must sacrifice. The greatest part about America is her hope and freedom, and if we lose the ability to spread hope and freedom to the world we have committed a crime against the world."
That said, I'm all for the black guy who attended an Islamic school, admitted to using drugs, didn't have the opportunity to vote for the war, and, even though I'm not religious, is the most genuine candidate when it comes to his religion. Plus, he doesn't seem scared of anybody or anything, unlike all the other candidates who seem to be itching for the chance to show just how tough they can be.
-----NOTE-----
This is not the tone I originally intended for this post... I was going to write about Xinhua's primary coverage and how everybody seems to be excited by this Primary, but I got carried away. That said, Xinhua's coverage on the English page is pretty boring, but you get lots of fun stuff in the Chinese section. They're pretty sure that China's going to be an easy target for all of the candidates, and while playing the "Crying Card" can be good for US Presidential Candidates, it is not recommended for female US Presidential Candidates.
Wednesday, January 2, 2008
Ring in the New Year...
...With New Laws!
Brad Luo at China Business Law Blog does a great job of breaking down the important legislation of 2007 in this post. Just add in the revised Catalog for the Guidance of Foreign Invested Enterprises (外商投资产业指导目录), and you've got a complete list of the important laws for foreign investment last year.
Mr. Luo also covers the new labor laws. Here's a quick rundown on the laws that came into effect on January 1, 2008:
1) Labor Contract Law (中华人民共和国劳动合同法)
This is a big deal. The most important thing for anybody doing business in China is making sure that you are in compliance with this law by February 1, 2008, or your worker's can hold you liable for double pay. Basically, get written contracts with your employees or anybody who might be considered an employee, and write an employee handbook in Chinese that explains firing criteria. If you want more, go to China Law Blog's extensive coverage.
2) Employment Promotion Law (中华人民共和国就业促进法)
WilmerHale has an extensive rundown on this private sector employment promotion and non-discrimination law, here. Their basic conclusion is that this law will have little to no effect on foreign investors. I agree. WilmerHale points out that though private litigation by workers is allowed by the law, the lack of specific penalties will probably result in limited enforcement of the non-discrimination provisions.
3) Law on Animal Epidemic Prevention (中华人民共和国动物防疫法)
There may have been ~90,000 cat and dog attacks on humans in Beijing through the first half of '07, but chances are that the mandatory vaccinations required by this law are more the product of worries about what might come out of a poultry farm than out of Fido. Here's a Xinhua article on this.
Brad Luo at China Business Law Blog does a great job of breaking down the important legislation of 2007 in this post. Just add in the revised Catalog for the Guidance of Foreign Invested Enterprises (外商投资产业指导目录), and you've got a complete list of the important laws for foreign investment last year.
Mr. Luo also covers the new labor laws. Here's a quick rundown on the laws that came into effect on January 1, 2008:
1) Labor Contract Law (中华人民共和国劳动合同法)
This is a big deal. The most important thing for anybody doing business in China is making sure that you are in compliance with this law by February 1, 2008, or your worker's can hold you liable for double pay. Basically, get written contracts with your employees or anybody who might be considered an employee, and write an employee handbook in Chinese that explains firing criteria. If you want more, go to China Law Blog's extensive coverage.
2) Employment Promotion Law (中华人民共和国就业促进法)
WilmerHale has an extensive rundown on this private sector employment promotion and non-discrimination law, here. Their basic conclusion is that this law will have little to no effect on foreign investors. I agree. WilmerHale points out that though private litigation by workers is allowed by the law, the lack of specific penalties will probably result in limited enforcement of the non-discrimination provisions.
3) Law on Animal Epidemic Prevention (中华人民共和国动物防疫法)
There may have been ~90,000 cat and dog attacks on humans in Beijing through the first half of '07, but chances are that the mandatory vaccinations required by this law are more the product of worries about what might come out of a poultry farm than out of Fido. Here's a Xinhua article on this.
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