I signed up for an International Investments class which meets on Friday and (gasp) Saturday mornings for 3 hours. Last Saturday we discussed cross border real estate deals and project finance for infrastructure investment, both compelling topics. But, I was completely unprepared for our final discussion.
The professor wrote our textbook, and at the end his chapter that we covered that day was a short essay on bribery and the FCPA. The gist of the discussion in the book was don't bribe people. The professor opened the discussion by asking us what is wrong with bribes?
Well, we came up with things like it damages predictability, hurts the ultimate quality of the project, and weakens the rule of law in the country where you bribe. All good answers, but he challenged us to come up with reasons why bribery is morally wrong. The short answer is that there is no good reason. Attitudes towards bribery tend to be governed by cultural norms. In some cultures there is an entitlement to bribes, in others, civil servants are paid so little that they are almost expected to take bribes. That doesn't excuse big governmental fish from taking bribes, though, just small fry.
This presents problems for those from, say, America, who might refuse to bribe because they say it is wrong. It is not necessarily wrong, and if you claim this as your excuse for not bribing somebody your excuse might fall on deaf ears. Fortunately for Americans and citizens of EU member states, we can refuse to bribe because we have laws such as the FCPA which will land us in jail if we bribe. This is a great excuse, and foreign officials will understand.
But, sometimes the deal gets stuck, and you need an alternative to bribery that won't land you in the slammer courtesy of the FCPA. The following is for educational purposes only in order to be aware of what others will try to, and probably can get away with. Remember, he who must bribe is typically peddling a crappier product, or didn't do their time tables right.
Bribery Alternative 1
This sort of alternative tends to arise in infrastructure investments requiring project finance. If you have a significant governmental roadblock, you could allow an authority to have equity participation in the project courtesy of a loan from another member participating in the project. The terms of the loan might call for the termination of the equity interest in the project if interest payments on the loan have not been made for a period of time. These are probably not illegal under any sort of bribery laws.
As a slight modification, you could setup a family trust for the authority figure in another country if they don't want their own local authorities to find out about the arrangement.
Bribery Alternative 2
They call these facilitating payments. Say you've got a turbine sitting in a shipping container at a port of entry. The port guy says it'll take him until next week to do the inspection. Assuming your shipping container actually contains a turbine and is not full of AK-47's, it is probably not bribery by any legal standard to give him a tip to speed up his completion of a service that you're already entitled to.
Tuesday, January 27, 2009
Sunday, January 25, 2009
Posts of the Week: 1/19/09 - 1/25/09
More on SASAC's "Not For Sale" Sign at ChinaBizGov
China plight at Free Exchange
China Joint Ventures And The Hotel California Effect at China Law Blog
Zhejiang Courts Making a Mark on China's IP Law at China Business Law Blog
Civil and Criminal Liability in China -- Sanlu Group & the Melamine Milk Scandal at The Conglomerate
Redux: Why Geithner's Words Don't Matter (Yet) at ChinaBizGov
China plight at Free Exchange
China Joint Ventures And The Hotel California Effect at China Law Blog
Zhejiang Courts Making a Mark on China's IP Law at China Business Law Blog
Civil and Criminal Liability in China -- Sanlu Group & the Melamine Milk Scandal at The Conglomerate
Redux: Why Geithner's Words Don't Matter (Yet) at ChinaBizGov
Saturday, January 24, 2009
The New SourceJuice is Live!
SourceJuice has long been a solid source for weekly information on sourcing in China. A couple of days ago the SourceJuice team launched Version 2.0.
Version 2.0 is SourceJuice on steroids. The main goal is to provide transparency for those looking to do business in China. To this end they are:
Version 2.0 is SourceJuice on steroids. The main goal is to provide transparency for those looking to do business in China. To this end they are:
- Machine translating the continuously expanding trade regulation.
- More frequently writing articles.
- Implementing online trade forums.
- And, more services are coming.
Thursday, January 22, 2009
USTR on China's WTO Compliance: Damn Thing in a Nutshell
What follows is a comment on my primary complaint with the report, and following that is a summary of the USTR's take on China's compliance with its WTO obligations by subject area. The summary isn't quite 115 pages, and the topics follow the table of contents of the report. They should be taken with a grain of salt because the USTR is supposed to be in the business of protecting and fostering American business, but they are USTR's observations of China's fulfillment of its obligations under China's bilateral and multilateral WTO obligations.
I was surprised by the overall tone of the report. There was a lot of optimism towards future bilateral cooperation in helping China fulfill its obligations. Also, the language was often less damning than it could have been relying on many "appears to be's" when referring to possibly protectionist tools and motives.
MY COMPLAINT
I was really disappointed that there was not a more substantial look at the results of the AML review with regards to the InBev and Anheuser-Busch merger. Anheuser-Busch is still an American company despite foreign ownership, and MOFCOM did restrict AB's ability to compete in China through InBev ownership restrictions in various Chinese breweries. In a single sentence, without naming the parties, the USTR did say that the AML decision did suggest that China might use the AML to restrict the competitive ability of foreign companies, as it did with InBev, as opposed to preventing monopolies, which the US DOJ did when it forced InBev to sell off its Labatt USA division. Of course, the line between anti-competitive and anti-monopoly is thin, and it is unclear if Labatt USA and AB together would've been a monopoly outside of upstate New York, but the AML looms large in the future of M&A in China. Certainly larger than a couple of paragraphs.
SUMMARY
Trading Rights
Trading rights covers the right to import goods into China, and the right to export goods from China, and does not cover the right to sell goods within China.
The USTR concludes that China is complying with its WTO trading rights commitments in most areas, except for the right to import "copyright-intensive products such as books, newspapers, journals, theatrical films, DVDs and music, which China still reserves for state trading." The report does not comment on why the state retains the sole right to distribute foreign sourced media, but the reason is easily inferred.
Distribution Services
Distribution services are the rights to sell goods within China.
The USTR concludes that China has made "substantial progress" in fulfilling its WTO obligations, but that there are significant concerns in the areas of wholesale services, retail services, franchising services, and direct selling services.
Concerns for wholesale services:
Tariffs
China has timely implemented its tariff commitments.
Customs and Trade Administration
China's regulations for clearance procedures and making customs valuation determinations comply with WTO rules, but implementation is inconsistent by port.
China has complied with the rules of origin requirements.
China has complied with WTO rules on import licensing, but there are a few concerns:
China realized its commitment to eliminate its non-tariff measures in January 2005.
Tariff-rate Quotas on Industrial Products
A tariff-rate quota is a measure designed to allow a set quantity of imports at a low tariff rate, and imports above that quota are subject to a higher tariff rate. The idea is to provide significant market access.
The US was granted tariff-rate quotas for the importation of three industrial products into China, but China appears to not be fulfilling its obligations with respect to fertilizer tariff-rate quotas in an effort to promote homegrown fertilizer production. US fertilizer exports to China have fallen from $676 million in 2002 to $97 million in 2007. At the same time, China has restricted the export of phosphate rock, a key fertilizer ingredient, which has driven down the in China production price of fertilizer.
Other Import Regulation
Points on Anti-Dumping:
China maintains export restrictions that appear to violate WTO rules:
VAT and micromanagement of the size of the export rebate "have caused tremendous disruption, uncertainty and unfairness in the global markets for some products." The goal appears to be the same as with China's export regulations: lower production prices for China's industry and higher costs for foreign importers. Additionally, China appears to use fluctuating VAT rebates to inhibit domestic expansion in certain sectors.
Internal Policies Affecting Trade
Non-discrimination
China has largely complied with rewriting their rules in favor of non-discrimination between domestic and foreign business, but some concerns remain:
China is using its tax system to discriminate against certain imports:
Substantial subsidies are provided to China's domestic industries. General concerns:
China continues to use price controls and pricing guidance. An industry of particular interest to the USTR is the medical device industry. There are state mandated price limits on the allowable mark-ups on medical devices leading to concerns of reduced competition, and the impact on patient and physician choice.
Standards, Technical Regulations and Conformity Assessment Procedures
China maintains and develops its own unique national standards "apparently as a means for protecting domestic companies from competing foreign technologies and standards." The most well-known is the telecommunications squabble over 3G neutrality.
Rules governing China's regulators should be in compliance, but regulators don't appear to enforce requirements against domestic products as strictly as against foreign products.
Rather than turning to the international trend of accepting foreign test results, China is turning more towards in-country testing.
China has made progress towards transparency, but they apparently are still not notifying interested parties of revisions to their standards which is against WTO rules.
Other Internal Policies
Concerns over government intervention in the investment decisions of SOEs in certain sectors:
China's state trading enterprises lack the transparency necessary to even assess their activities.
China's government procurement measures give preference to domestic industry, but China is not yet a signatory to WTO's Government Procurement Agreements.
Investment
Though laws have and regulations have been revised to eliminate many investment restrictions, many of those restrictions are "encouraged." Particularly:
Many restrictions "appear designed to shield inefficient and monopolistic Chinese enterprise from foreign competition."
Agriculture
The proper tariff measures have been implemented but China uses a variety of non-tariff measures to protect its industry.
A lack of transparency in how China is implementing its agricultural tariff-rate quotas against American bulk agricultural commodities is causing some grumbling from American farmers.
There are concerns about the procedures surrounding China's approval for genetically modified US agricultural products, particularly transparency, but there have been no "major trade disruptions."
China's Sanitary and Phytosanitary measures (detecting and preventing the spread of agricultural epidemics such as mad cow disease or avian influenza) lack transparency and "appear to lack scientific bases." The US beef industry and poultry industry have some pull, and they are rather angry that they can't sell their products in China.
China has not notified the WTO of all of its subsidies as required, and thus it is difficult to tell whether they maintain export subsidies.
Intellectual Property Rights
China's laws and regulations are satisfactory in complying with TRIPS, except in one area: lack of effective criminal punishment for violations.
The US still has concerns that China's legal framework does not effectively deter:
China is working towards better enforcement, but their enforcement of IPR violations is bad, particularly in the field of copyright. The USTR suggests that if China stopped limiting market access barriers for copyrighted material, then there might be less incentive to engage in piracy.
Services
Certain service sectors remain severely restricted, and many commitments were only nominally implemented.
The types of problemss:
It is not clear that China is printing all of its trade related regulations in a single official journal.
The laws are not being uniformly applied.
I was surprised by the overall tone of the report. There was a lot of optimism towards future bilateral cooperation in helping China fulfill its obligations. Also, the language was often less damning than it could have been relying on many "appears to be's" when referring to possibly protectionist tools and motives.
MY COMPLAINT
I was really disappointed that there was not a more substantial look at the results of the AML review with regards to the InBev and Anheuser-Busch merger. Anheuser-Busch is still an American company despite foreign ownership, and MOFCOM did restrict AB's ability to compete in China through InBev ownership restrictions in various Chinese breweries. In a single sentence, without naming the parties, the USTR did say that the AML decision did suggest that China might use the AML to restrict the competitive ability of foreign companies, as it did with InBev, as opposed to preventing monopolies, which the US DOJ did when it forced InBev to sell off its Labatt USA division. Of course, the line between anti-competitive and anti-monopoly is thin, and it is unclear if Labatt USA and AB together would've been a monopoly outside of upstate New York, but the AML looms large in the future of M&A in China. Certainly larger than a couple of paragraphs.
SUMMARY
Trading Rights
Trading rights covers the right to import goods into China, and the right to export goods from China, and does not cover the right to sell goods within China.
The USTR concludes that China is complying with its WTO trading rights commitments in most areas, except for the right to import "copyright-intensive products such as books, newspapers, journals, theatrical films, DVDs and music, which China still reserves for state trading." The report does not comment on why the state retains the sole right to distribute foreign sourced media, but the reason is easily inferred.
Distribution Services
Distribution services are the rights to sell goods within China.
The USTR concludes that China has made "substantial progress" in fulfilling its WTO obligations, but that there are significant concerns in the areas of wholesale services, retail services, franchising services, and direct selling services.
Concerns for wholesale services:
- Restrictions ont he distribution of copyright-intensive products.
- Foreign automobile dealerships face restrictions that may not be applied to domestic dealerships.
- Significant restrictions in the pharmaceuticals sector still prevent foreign companies from fully realizing their potential in China.
- Despite commitments to permit foreign wholesale distribution of crude oil and petrol in China, China has issued regulations resulting in significant impediments to the profitable wholesale of crude and petrol by foreign companies within China.
- When expanding operations, foreign retailers are faced with onerous and lengthy licensing requirements that are not faced by domestic competitors. However, China is implementing a new licensing process.
- MOFCOM has issued a notice refusing approval for foreign retail stores in cities that have not finalized their urban commercial network plans.
- Despite committing to allowing WOFE retail gas stations, China has treated retail gas stations "as falling under the chain store provision in its Services Schedule, which permits only joint ventures with minority foreign ownership."
- Despite committments allowing foreigner enterprises to provide franchising services in China without "market access or national treatment limitations," MOFCOM issued and continues to enforce rules regarding high capital requirements, and broad and vague information disclosure with uncertain liability.
- However, China has eased rules regarding eligibility for providing services.
- MOFCOM appears to have ceased issuing direct selling licenses in May 2007.
- When MOFCOM was issuing direct selling licenses, the requirements were vague and excessively burdensome for SMEs.
Tariffs
China has timely implemented its tariff commitments.
Customs and Trade Administration
China's regulations for clearance procedures and making customs valuation determinations comply with WTO rules, but implementation is inconsistent by port.
China has complied with the rules of origin requirements.
China has complied with WTO rules on import licensing, but there are a few concerns:
- China is apparently using licensing requirements that restrict the trade of iron ore. Licensed iron ore traders have decreased, and China may have suspended the issuance of licenses to Australian importers to limit price increases in on going negotiations. The USTR is worried that this could set a precedent for the restriction of trade in other raw materials.
- Various import licensing issues related to fertilizer, cotton, SPS measures, soybeans, meat, and poultry.
China realized its commitment to eliminate its non-tariff measures in January 2005.
Tariff-rate Quotas on Industrial Products
A tariff-rate quota is a measure designed to allow a set quantity of imports at a low tariff rate, and imports above that quota are subject to a higher tariff rate. The idea is to provide significant market access.
The US was granted tariff-rate quotas for the importation of three industrial products into China, but China appears to not be fulfilling its obligations with respect to fertilizer tariff-rate quotas in an effort to promote homegrown fertilizer production. US fertilizer exports to China have fallen from $676 million in 2002 to $97 million in 2007. At the same time, China has restricted the export of phosphate rock, a key fertilizer ingredient, which has driven down the in China production price of fertilizer.
Other Import Regulation
Points on Anti-Dumping:
- Largely in compliance with WTO obligations.
- China is one of the most prolific users of AD provisions, but they don't have regulations establishing rules and procedures for reviews on the expiration of their anti-dumping duties.
- Despite bilateral cooperation, China's AD procedures lack transparency, and the responsible government administrations have failed to turn over documents, have inadequately disclosed essential facts, and have failed to adequately address critical arguments and evidence presented by those affected by AD duties
- China has yet to implement any CVDs, but, as with AD duties, China does not yet have expiry review rules and procedures.
- China has conducted only one safeguard proceeding which resulted in tariff-rate quotas on steel products, and this measure was terminated in 2003.
- There are some inconsistencies with WTO rules on safeguards, but it is unclear how China will use safeguards.
China maintains export restrictions that appear to violate WTO rules:
- Export quotas
- Export licensing and bidding requirements
- Minimum export prices and export duties
VAT and micromanagement of the size of the export rebate "have caused tremendous disruption, uncertainty and unfairness in the global markets for some products." The goal appears to be the same as with China's export regulations: lower production prices for China's industry and higher costs for foreign importers. Additionally, China appears to use fluctuating VAT rebates to inhibit domestic expansion in certain sectors.
Internal Policies Affecting Trade
Non-discrimination
China has largely complied with rewriting their rules in favor of non-discrimination between domestic and foreign business, but some concerns remain:
- Evidence of dual-pricing schemes by SOEs working with domestic and foreign enterprises.
- The ACFTU has been stepping up recruitment efforts in FIEs, and their interests appear to be principally monetary with little regard for the workers' rights.
- Application of the VAT appears to be discriminatory between imported and domestic goods.
China is using its tax system to discriminate against certain imports:
- Fertilizer VAT for imports, and partial VAT rebates for domestic producers of urea, a nitrogen fertilizer.
- Again, VAT discrimination is huge.
- Apparent preferential treatment for border trade, particularly with Russia.
- Difference in consumption taxes between domestic products and imports.
Substantial subsidies are provided to China's domestic industries. General concerns:
- China issues incomplete subsidy notification reports.
- Significant use of subsidies outside China's taxation system provided by provincial and local governments.
China continues to use price controls and pricing guidance. An industry of particular interest to the USTR is the medical device industry. There are state mandated price limits on the allowable mark-ups on medical devices leading to concerns of reduced competition, and the impact on patient and physician choice.
Standards, Technical Regulations and Conformity Assessment Procedures
China maintains and develops its own unique national standards "apparently as a means for protecting domestic companies from competing foreign technologies and standards." The most well-known is the telecommunications squabble over 3G neutrality.
Rules governing China's regulators should be in compliance, but regulators don't appear to enforce requirements against domestic products as strictly as against foreign products.
Rather than turning to the international trend of accepting foreign test results, China is turning more towards in-country testing.
China has made progress towards transparency, but they apparently are still not notifying interested parties of revisions to their standards which is against WTO rules.
Other Internal Policies
Concerns over government intervention in the investment decisions of SOEs in certain sectors:
- "Strategic Industries": civil aviation, coal, defense, electric power/grid, oil and petrochemicals, shipping, telecommunications."
- Pillar Industries": automotive, chemical, construction, equipment manufacturing, information technology, iron and steel, nonferrous metals, surveying and design, and others.
China's state trading enterprises lack the transparency necessary to even assess their activities.
China's government procurement measures give preference to domestic industry, but China is not yet a signatory to WTO's Government Procurement Agreements.
Investment
Though laws have and regulations have been revised to eliminate many investment restrictions, many of those restrictions are "encouraged." Particularly:
- Technology transfer
- Local content
- Foreign exchange balancing
- Export performance
Many restrictions "appear designed to shield inefficient and monopolistic Chinese enterprise from foreign competition."
Agriculture
The proper tariff measures have been implemented but China uses a variety of non-tariff measures to protect its industry.
A lack of transparency in how China is implementing its agricultural tariff-rate quotas against American bulk agricultural commodities is causing some grumbling from American farmers.
There are concerns about the procedures surrounding China's approval for genetically modified US agricultural products, particularly transparency, but there have been no "major trade disruptions."
China's Sanitary and Phytosanitary measures (detecting and preventing the spread of agricultural epidemics such as mad cow disease or avian influenza) lack transparency and "appear to lack scientific bases." The US beef industry and poultry industry have some pull, and they are rather angry that they can't sell their products in China.
China has not notified the WTO of all of its subsidies as required, and thus it is difficult to tell whether they maintain export subsidies.
Intellectual Property Rights
China's laws and regulations are satisfactory in complying with TRIPS, except in one area: lack of effective criminal punishment for violations.
The US still has concerns that China's legal framework does not effectively deter:
- Squatting on foreign company names, designs and trademarks
- Theft of trade secrets
- Registering TMs as design patents
- Using falsified or misleading license documents in counterfeiting operations
- False indications of geographic origin
China is working towards better enforcement, but their enforcement of IPR violations is bad, particularly in the field of copyright. The USTR suggests that if China stopped limiting market access barriers for copyrighted material, then there might be less incentive to engage in piracy.
Services
Certain service sectors remain severely restricted, and many commitments were only nominally implemented.
The types of problemss:
- Out right refusal of licenses
- Excessive and possibly discriminatory capital requirements
- Branching restrictions
- Lack of transparency in licensing
- Lengthy delays
- Economic needs test
- Banking
- Credit card
- Securities
- Asset management
- Telecommunications
- Construction
- Insurance
- Legal
It is not clear that China is printing all of its trade related regulations in a single official journal.
The laws are not being uniformly applied.
Wednesday, January 21, 2009
A Review: Capitalism With Chinese Characteristics
Yasheng Huang's Capitalism With Chinese Characteristics is an impressive book. Most impressive because it is the most in depth economic study of town and village enterprises (TVEs) complete with new data showing that even in 1985, "of the 12 million businesses classified as TVEs, 10 million were completely and manifestly private."
My education of business forms in China has focused on those the state allows foreigners to have an ownership interest in. Mr. Huang implies that Joseph Stiglitz has done the most in illuminating TVEs to the Western world as a fine example of how China's development strategy of public ownership has minimized "an extremely serious problem affecting transitional economies:" the stealing of assets by private investors. Conclusions from Mr. Huang's case study of the Pear River Refrigerator Factory TVE, or the Kelon Group, in Chapter 2, Part 2 stand in direct contrast to Mr. Stiglitz's conclusions based on the exact same TVE.
When Kelon was formed by Wang Guoduan in the 1980s, there was no legal framework to allow an entrepreneur to register a private business in the anticipated size of Kelon. Mr. Wang arranged for a loan and credit line from the township, registered the firm as a TVE with nominal control by the township, and quickly repaid the loan. The company performed very well while Mr. Wang was in control, and, in contrast to Mr. Stiglitz's conclusions, the only evidence of "massive plundering of Kelon's assets by the state-owned holding company" occurred after the township that had been exercising nominal control replaced the founding members of Kelon with their own people.
The first half of all of the chapters begin this way. A widely held perception of an aspect of China's economy is presented, and Mr. Huang tears it down by examining the details of the actual form and nature of business. In the case of TVEs, "China lacks efficient legal and financial institutions," but entrepreneurs have been very savvy in finding ways to circumvent the strict formal requirements of operating a business. Mr. StgliStiglitz is not the only one that Mr. Huang takes aim at.
In a later chapter he attempts to deflate the enthusiasm that Thomas Friedman and the World Bank seem to share about Shanghai's apparent embrace of free market globalization. Mr. Huang shares a quote from Chen Liangyu, Shanghai's former Party Secretary and currently serving an 18 year sentence for corruption in Qincheng Prison, that should tip off any economist regarding the superficially apparent capitalist nature of Shanghai:
I really like the first half of all of the chapters. Mr. Huang narrates case studies and explains the general economic issues quite well. Where I get lost is in the second half of the chapters. The economics becomes very serious, and I lack the formal training to claim that I actually understand what is going on. I can make some sense, but I'm not sure exactly what sort of holes to look for.
Basically what I'm trying to say is, I'm not embarrassed that I read these portions of the book with a less critical eye, and I don't think you should be either. Us econ lay people should enjoy the stories and conclusions presented in the first half of the chapters and let the economists and peer reviewers battle out the numbers presented in the second half. If there is some sort of consensus, then we take the stories and conclusions at face value. If there is not, then we await the conclusions and stories in the next book examining China's economy, and wait for that battle to be resolved.
By the way, peer reviews and popular reviews of the book have been excellent. The most widely circulated popular reviews are courtesy of Bloomberg.com and The Economist (which also named it one of the top economics books of 2008).
My education of business forms in China has focused on those the state allows foreigners to have an ownership interest in. Mr. Huang implies that Joseph Stiglitz has done the most in illuminating TVEs to the Western world as a fine example of how China's development strategy of public ownership has minimized "an extremely serious problem affecting transitional economies:" the stealing of assets by private investors. Conclusions from Mr. Huang's case study of the Pear River Refrigerator Factory TVE, or the Kelon Group, in Chapter 2, Part 2 stand in direct contrast to Mr. Stiglitz's conclusions based on the exact same TVE.
When Kelon was formed by Wang Guoduan in the 1980s, there was no legal framework to allow an entrepreneur to register a private business in the anticipated size of Kelon. Mr. Wang arranged for a loan and credit line from the township, registered the firm as a TVE with nominal control by the township, and quickly repaid the loan. The company performed very well while Mr. Wang was in control, and, in contrast to Mr. Stiglitz's conclusions, the only evidence of "massive plundering of Kelon's assets by the state-owned holding company" occurred after the township that had been exercising nominal control replaced the founding members of Kelon with their own people.
The first half of all of the chapters begin this way. A widely held perception of an aspect of China's economy is presented, and Mr. Huang tears it down by examining the details of the actual form and nature of business. In the case of TVEs, "China lacks efficient legal and financial institutions," but entrepreneurs have been very savvy in finding ways to circumvent the strict formal requirements of operating a business. Mr. StgliStiglitz is not the only one that Mr. Huang takes aim at.
In a later chapter he attempts to deflate the enthusiasm that Thomas Friedman and the World Bank seem to share about Shanghai's apparent embrace of free market globalization. Mr. Huang shares a quote from Chen Liangyu, Shanghai's former Party Secretary and currently serving an 18 year sentence for corruption in Qincheng Prison, that should tip off any economist regarding the superficially apparent capitalist nature of Shanghai:
If I am not mistaken, in our country, private businesses contribute 40 of GDP. In our Shanghai, SOEs create nearly 80 percent of Shanghai's GDP. Who upholds socialism most rigorously? Who else if it is not Shanghai?But, numbers are tough, and the World Bank tends to focus on a single number: FDI.
I really like the first half of all of the chapters. Mr. Huang narrates case studies and explains the general economic issues quite well. Where I get lost is in the second half of the chapters. The economics becomes very serious, and I lack the formal training to claim that I actually understand what is going on. I can make some sense, but I'm not sure exactly what sort of holes to look for.
Basically what I'm trying to say is, I'm not embarrassed that I read these portions of the book with a less critical eye, and I don't think you should be either. Us econ lay people should enjoy the stories and conclusions presented in the first half of the chapters and let the economists and peer reviewers battle out the numbers presented in the second half. If there is some sort of consensus, then we take the stories and conclusions at face value. If there is not, then we await the conclusions and stories in the next book examining China's economy, and wait for that battle to be resolved.
By the way, peer reviews and popular reviews of the book have been excellent. The most widely circulated popular reviews are courtesy of Bloomberg.com and The Economist (which also named it one of the top economics books of 2008).
Tuesday, January 20, 2009
Posts of the Week: 1/12/09 - 1/18/09
The Latest on FDI in China at China Law Blog
Worry about a fall in China’s demand for the world’s goods, not a fall in China’s demand for Treasuries by Brad Setser
There Are Many Ways China Can Hit 8% Growth - Part 1 and Part 2 at All Roads
Governance and Accoutability Issues for NGOs at Crossroads
Worry about a fall in China’s demand for the world’s goods, not a fall in China’s demand for Treasuries by Brad Setser
There Are Many Ways China Can Hit 8% Growth - Part 1 and Part 2 at All Roads
Governance and Accoutability Issues for NGOs at Crossroads
Thursday, January 15, 2009
Posts of the Year
I reviewed the posts I've linked to in trying to come up with a list of what I thought were the most useful posts that I've read, but I'm having a lot of trouble. There have been so many wonderfully written substantive posts by others over the past year that I really can't boil it down into something more manageable. Posts of the Week has become my personal reference guide for the China business and legal issues I dig. This blogosphere is just awesome. The amount of quality info coming out of yer all's fingertips: staggering. I look forward to another good year, and reading your interpretations and analyses of laws that the NPC has in store this year.
But, I'm gonna leave ya with the Honorable Mention for "a" post of the year:
"The" way vs "a" way.
But, I'm gonna leave ya with the Honorable Mention for "a" post of the year:
"The" way vs "a" way.
Tuesday, January 13, 2009
My Posts of the Year
Oh, wow. I totally apologize. It has been a while since I've written anything. Dang those finals, and vacations. Anyways, I'm back in school for my final semester. I'm going to start off with a post today on my favorite posts that I've written since I started this blog. These will be divided into two categories: 1) substantively useful posts; and 2) posts I had fun writing. I'm doing this so that I can 1) take stock of the year; 2) find my most legally relevant posts more easily; and 3) remind myself that it's alright to have some fun.
Tomorrow, I'll post a list of the most substantively useful posts written by other bloggers since I started doing Posts of the Week, which looks like it was the end of last November.
Without further ado...
Substantively Useful
DBCP, China, and Forum Non Conveniens
The main findings of my unpublished journal article.
Climate Change: CDM, CER & PRC
Liebman on Restricted Reform in China Courts
Optimism for reform in China's courts is always appreciated, especially when backed up with solid research.
China IP Litigation Data and an interpretation
I'd venture that this put me on the map.
Uncertainty is Bad for Business
My argument for a DMCA-style safe harbor provision for OSPs in China.
Taking Depositions in China: Part I, Part II, Part III & Part IV
Useful research from my journal article.
Energy: Learning from the Mistakes of Others & an Update
A brief history of the Enron debacle and what China wasn't doing to prevent the same sort of problem, until they did.
Less Red Ribbon Equals More Ribbon Cutting Events
Summary of William Chandler and Holly Gwin's argument that there are still significant barriers to clean energy investment in China.
VC in China from K@W by way of CER and Forbes, plus a Pira... Privateer Story
What it says it is: a summary of venture capital in China by venture capitalists.
China Economic Review on the Form of Private Equity in China
China's Sarbanes Oxley
A look at corporate governance in China under the guise of examining the Basic Standard for Enterprise Internal Control which is to become effective on July 1, 2009.
NCAs in China
Sales To and From China. What Does Your Choice of Law Clause Look Like?
"Operation Shell Games," or How Not to Get Business Visas to the US
Just some simple advice: avoid fraud and conspiracy.
When the Good Times Come to An End: "Bankruptcy in China"
Comparative look from a summary of an Economist article.
When Do CJVs Make Sense?
When you want to create the legal fiction of preferred stock in your Chinese venture.
Of China's Trade Discrepancies and Chinese Tax Havens
After reading Capitalism with Chinese Characteristics, I understand this situation much better than when I wrote this post, but I think the post is still useful.
A Cross Pacific Look at AML/Antitrust in Action
I'd still rather be subjected to the US DOJ requirements than MOFCOM's requirements.
Fun
Sometimes a scream is better than a thesis
Can you tell that I was working under some sort of deadline?
Caucus Time in Iowa
I hope that I can tell my grandchildren with pride that I went with Barack Obama before any of the Iowa returns came in.
Posts of the Week: 2/10 - 2/17
I'm not sure if the lesson is that I should or should not watch the Daytona 500 while writing.
Chinese Art & The Law
It is always fun to have an excuse to peruse auction catalogs. The legal analysis kind of turns to crap, and it was supposed to more strongly imply that you might want to avoid buying wood antiques in China unless you're some sort of expert and can rely on the legal advice of someone other than an antiques dealer.
Beware: That Russian Air Superiority Fighter You Just Bought Might Be An Improved Chinese Knockoff
Almost as fun as perusing auction catalogs is surfing the pages of FAS.
Anti-Circumvention: "We Must Find a Way, or We Will Make One"
I promise that I won't list every post that I used to make a reference to the Punic Wars, or to Charles Martel.
I really really like us too
Or posts that I used to make references to Jim Carrey movies.
An Intimate Evening With John Bolton
Admittedly, I had the most fun with the title.
Tomorrow, I'll post a list of the most substantively useful posts written by other bloggers since I started doing Posts of the Week, which looks like it was the end of last November.
Without further ado...
Substantively Useful
DBCP, China, and Forum Non Conveniens
The main findings of my unpublished journal article.
Climate Change: CDM, CER & PRC
Liebman on Restricted Reform in China Courts
Optimism for reform in China's courts is always appreciated, especially when backed up with solid research.
China IP Litigation Data and an interpretation
I'd venture that this put me on the map.
Uncertainty is Bad for Business
My argument for a DMCA-style safe harbor provision for OSPs in China.
Taking Depositions in China: Part I, Part II, Part III & Part IV
Useful research from my journal article.
Energy: Learning from the Mistakes of Others & an Update
A brief history of the Enron debacle and what China wasn't doing to prevent the same sort of problem, until they did.
Less Red Ribbon Equals More Ribbon Cutting Events
Summary of William Chandler and Holly Gwin's argument that there are still significant barriers to clean energy investment in China.
VC in China from K@W by way of CER and Forbes, plus a Pira... Privateer Story
What it says it is: a summary of venture capital in China by venture capitalists.
China Economic Review on the Form of Private Equity in China
China's Sarbanes Oxley
A look at corporate governance in China under the guise of examining the Basic Standard for Enterprise Internal Control which is to become effective on July 1, 2009.
NCAs in China
Sales To and From China. What Does Your Choice of Law Clause Look Like?
"Operation Shell Games," or How Not to Get Business Visas to the US
Just some simple advice: avoid fraud and conspiracy.
When the Good Times Come to An End: "Bankruptcy in China"
Comparative look from a summary of an Economist article.
When Do CJVs Make Sense?
When you want to create the legal fiction of preferred stock in your Chinese venture.
Of China's Trade Discrepancies and Chinese Tax Havens
After reading Capitalism with Chinese Characteristics, I understand this situation much better than when I wrote this post, but I think the post is still useful.
A Cross Pacific Look at AML/Antitrust in Action
I'd still rather be subjected to the US DOJ requirements than MOFCOM's requirements.
Fun
Sometimes a scream is better than a thesis
Can you tell that I was working under some sort of deadline?
Caucus Time in Iowa
I hope that I can tell my grandchildren with pride that I went with Barack Obama before any of the Iowa returns came in.
Posts of the Week: 2/10 - 2/17
I'm not sure if the lesson is that I should or should not watch the Daytona 500 while writing.
Chinese Art & The Law
It is always fun to have an excuse to peruse auction catalogs. The legal analysis kind of turns to crap, and it was supposed to more strongly imply that you might want to avoid buying wood antiques in China unless you're some sort of expert and can rely on the legal advice of someone other than an antiques dealer.
Beware: That Russian Air Superiority Fighter You Just Bought Might Be An Improved Chinese Knockoff
Almost as fun as perusing auction catalogs is surfing the pages of FAS.
Anti-Circumvention: "We Must Find a Way, or We Will Make One"
I promise that I won't list every post that I used to make a reference to the Punic Wars, or to Charles Martel.
I really really like us too
Or posts that I used to make references to Jim Carrey movies.
An Intimate Evening With John Bolton
Admittedly, I had the most fun with the title.
Monday, January 12, 2009
Posts of the Week: 1/5/09 - 1/11/09
2008 China Law Brief Review Part I and Part II at China Business Law Blog
Brad Luo reviews major legal developments of the year.
Cyberlitigation Update - Looking for a Chiense Safe Harbor at China Hearsay
Well Known and Less Known Aspects of Well-Known Marks at IP Dragon
The Economic Downturn Will Increase Social Instability in China? Experts Disagree. at All Roads Lead to China
China's Advantage in the Coming Auto Wars? at ChinaBizGov
Trademarks in China: Nomen Est Omen at IP Dragon
Brad Luo reviews major legal developments of the year.
Cyberlitigation Update - Looking for a Chiense Safe Harbor at China Hearsay
Well Known and Less Known Aspects of Well-Known Marks at IP Dragon
The Economic Downturn Will Increase Social Instability in China? Experts Disagree. at All Roads Lead to China
China's Advantage in the Coming Auto Wars? at ChinaBizGov
Trademarks in China: Nomen Est Omen at IP Dragon
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